Monaco-based shipping company Scorpio Bulkers wrapped up the second quarter of this year with a significantly increased net income.
The company delivered a net income of USD 35 million in Q2 2019, against a net income of USD 0.8 million seen in the corresponding period a year earlier.
The increase was attributed primarily to a non-cash gain from the company’s equity investment in Scorpio Tankers unveiled in October 2018.
Scorpio Bulkers’ net income also included a write-down of assets held for sale of about USD 5.2 million, related to the classification of two Ultramaxes as held for sale and the write-off of deferred financing costs of the credit facilities related to SBI Electra and SBI Flamenco. The sale of the two Chinese-built vessels was completed in June 2019.
What is more, the net result comprised the write-off of deferred financing costs of about USD 2.7 million related to the refinancing of existing debt.
Total vessel revenues for the second quarter of 2019 stood at USD 49.1 million, compared to USD 60.6 million for the same period in 2018. Scorpio Bulkers’ time charter equivalent (TCE) revenues also decreased by USD 11.7 million in Q2 2019 from the prior year period.
As explained, rates were impacted by a reduction in coal imports in Europe and China, loss of iron ore exports from Vale’s tailing dam failure, and continued disruptions from the US-China trade war. Despite these challenges, a strong South American grain season and increasing coal exports to India provided support for improving Ultramax and Kamsarmax rates during the second quarter.
During the second quarter, the company began repositioning its fleet in preparation for the drydock and scrubber fitting program starting in the third quarter of 2019.
In June 2019, Scorpio Bulkers exercised its option to purchase and install exhaust gas cleaning systems on nine of its Kamsarmax vessels in 2020. After exercising this option, the company has contracts to purchase and install scrubbers on 37 of its vessels and has the option to purchase scrubbers for nine additional vessels in 2020.