Italian tanker shipping company d’Amico International Shipping (DIS) suffered a full-year net loss of USD 55.1 million in 2018 as a result of the weaker product tanker market.
The company’s net loss widened when compared to a loss of USD 38.1 million seen in 2017.
DIS’ daily spot rate was USD 10,798 in the full-year 2018, against USD 12,026 in the full-year 2017. The freight market hit historically low rates in the third quarter of the year but rebounded to profitable levels towards the end of 2018. At the beginning of 2019, they are showing clear signs of improvement, according to the company.
Time charter equivalent (TCE) earnings stood at USD 244.9 million in 2018, compared to USD 257.4 million recorded a year earlier.
“2018 was unfortunately one of the worst years for product tankers in the last decade. However, DIS managed to mitigate the effects of such a negative market, thanks to a prudent commercial strategy coupled with a constant focus on strengthening its financial structure,” Paolo d’Amico, Chairman and Chief Executive Officer of DIS, commented.
“We were very pleased to see our market rebounding to profitable levels towards the end of the year, with clear signs of improvement confirmed also at the start of 2019, relative to the prior year.”
As explained, the company’s main focus will be to strengthen its financial structure. With this objective, DIS’ Board of Directors approved on March 20, 2019, a share capital increase amounting to the USD equivalent of EUR 44 million, with preferential subscription rights offered to its existing shareholders and the new shares issued at a discount to the theoretical ex-rights price (TERP) of 15%, based on DIS’ reference share price on March 19. DIS’ controlling shareholder, d’Amico International SA, fully guarantees the offering. With this move, the company intends to reduce its financial leverage and improve liquidity position.
Referring to the outlook on the product market, Paolo d’Amico believes it is positive. Specifically, the net fleet growth of the segments DIS operates in is expected to be limited and below 2.0% over the next two years. Additionally, the sulphur cap in 2020 is expected to generate demand for the company’s vessels already from mid-2019.
“I believe DIS’ recent investments and our prudent commercial strategy, together with … fleet and organization, will allow us to benefit in full from the next expected positive shipping cycle. Our investment plan based on 22 newbuilding vessels we began to order in 2012 is now coming to an end, with the last LR1 ship expected to be delivered in Q3 2019,” DIS’ CEO concluded.