Awilco LNG, the listed Norwegian owner of four LNG carriers, has reported deep interim losses and warned of continued overcapacity in the market.
Group net loss in 2Q15 amounted to USD11.7 million compared to a small profit of USD0.2 million in the same period last year. Revenues plunged to USD7.3 million from USD19.8 million.
In 1H15, the loss amounted to USD16.5 million, while a year earlier Awilco LNG had booked again a profit of USD0.2 million. Revenues fell by more than 50%, to USD19.4 million from USD40 million.
“Despite sustained low LNG import to Asia and limited arbitrage opportunities the LNG shipping activity increased somewhat during the last part of the quarter. However, as a result of continued oversupply of available vessels, market rates did not improve and spot rates for TFDE [tri fuel diesel electric] LNG carriers weakened from USD35,000 per day at the beginning of the quarter to USD30,000 at the end of the quarter,” the company said in a statement.
Thirty-two newbuildings have been delivered over the last 12 months, so that there is currently an oversupply of vessels, which will have to be absorbed before the market will improve substantially. “The market for older tonnage has been even more affected by the increased fleet than the modern, more efficient tonnage. It is expected that the phasing out of older tonnage will increase due to the soft market,” Awilco LNG stated.
“Scheduled new LNG production and expected phasing out of older tonnage is expected to gradually improve utilisation and rates as the new production starts up,” the company said.