Despite outperforming the market on time charter equivalent earnings and costs, 2018 was a financially challenging year for Maersk Product Tankers.
The company faced the lowest spot market rates seen in a decade. Revenue in 2018 increased to USD 647 million from USD 621.1 million reported a year earlier.
During the period, Maersk Tankers recorded a loss of USD 31.1 million, significantly less compared to a loss of USD 489.9 million seen in the previous year.
The results were affected by the low spot market rates, but the company outperformed the market quarter on quarter, realizing a decline in time charter equivalent of 2.7% from 2017 compared to a decline in the market of 14.5%.
“Of course, we are not satisfied with the results. Having said that, we are among the industry leaders on performance and costs, despite the tough market conditions,” Christian M. Ingerslev, CEO at Maersk Product Tankers, said.
The company’s strong balance sheet and significant investments build a solid foundation for the future, especially in areas that will strengthen the company commercially and operationally, while focusing on safety and keeping vessels’ daily running costs at competitive levels, Ingerslev explained.
“We are prepared to take advantage of market opportunities that arise, retaining a market-leading position and remaining a vessel owner of choice among customers. This is possible due to a strong balance sheet which enables us to secure a competitive, high-quality fleet that is able to meet customer demand for global transportation of cargoes in a safe, efficient and reliable manner,” says Ingerslev.
Maersk Product Tankers said it remains positive about the mid- and long-term prospects for the tanker industry, and is well positioned to exploit the opportunities that will emerge.
On the demand side, trade is expected to increase sharply, driven by the advent of the new IMO 2020 sulphur regulations. With slowing vessel supply growth and vessel demand expected to rise, product tanker freight rates are projected to increase, starting at the end of 2019. Maersk Product Tankers’ result for 2019 is expected to improve due to higher freight rates and lower vessel operating costs.