VLCCs lose out

The weak VLCC market hit John Fredriksen’s Knightsbridge Tankers as full-year profit sank despite the fleet growing.

The New York-listed company has, however, seen fit to return to paying dividends and has hinted at further acquisitions as ship prices remain depressed.

John Fredriksen.

Net profit for the 12 months to the end of December was $21.68m as against $48.05m. This was as a result of waning revenues of $67.34m, down from the year-ago sum of $82.91m.

Total operating expenses rose from $33.8m to $43.58m as the company added two capesizes to its fleet which boosted voyage and ship operating expenses.

Interest expenses were up due to the company’s higher net debt levels.

Knightsbridge’s four VLCC’s earned far less last year than the previous year: average daily time charter equivalent (TCE) rates fell from $52,600 to $36,000. In the fourth quarter alone average tanker rates fell year-on-year by Worldscale 92, the equivalent of 70%, the company wrote in Tuesday’s bourse announcement.

Its two capesizes earned on average $43,400 a day with no comparable figure from the previous year when the company did not have any such vessels.

Knightsbridge did, however, report an average drop in bunker prices from $508 per ton to $370.

The company has returned to paying dividends and declared a cash payment of $0.30 for the fourth quarter.

It also hinted at future purchases by writing: “The board is monitoring the developments in the financial markets and the outlook for the shipping industry and believes that opportunities for expanding the fleet are increasing”.

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