IM Skaugen (IMSK), an Oslo-listed small LPG carrier and lighterage tanker operator, has cut its losses and continues to drive a strategic change of direction.
Group net losses for the first quarter were reduced to in 1Q15 to USD4.6 million from USD6.7 million in 1Q14. The operating result (EBIT) remained unchanged at a deficit of USD3.7 million.
The demand for ethane and LPG transport capacity increased, but this was not enough to compensate for weak demand in major commodities, such as ethylene, the company said. In addition, overcapacity in the size segment in which IMSK operates limited the improvement of the 1Q15 result.
The company has a fleet of 15 LPG carriers that range in size from 5,800 m³ to 12,000 m³. Six of the ships are capable of carrying LNG and IMS continues efforts to build up short-haul LNG business as the new core of its activities.
“IMSK is in a year-long development to transform the company and its revenue exposure from the LPG/petrochemical markets and into the energy markets,” the company said. “This is primary the small-scale LNG markets for regional distribution of LNG (long-term contract business). The prospective contracts in LNG are more attractive compared with employment in the more spot-focused LPG/petrochemical gas trade of the current Norgas business; both in terms of rates and contract duration.”
Its fleet of LPG carriers operates under the Norgas brand name.
“With our unique position of having six LNG-capable vessels now available, we stand well-positioned for these projects where smaller power plants are currently being converted to gas from either diesel or naphtha. The only missing link is the LNG logistics solution, where the marine transportation is the key element.
“The lower cost of electricity is a key driver, but environmental aspects are also important, especially on islands with holiday resorts – gas being the fossil fuel with the lowest emissions,” the company said.
IMSK, which also has a 50% stake in a crude oil tanker lighterage business, was the first Norwegian company to set up domestic transport business in China. This was done in the late 1990s together with a local partner.