Concordia Maritime, the listed tanker company in the Gothenburg-based Stena Sphere, plans to grow its fleet as both the crude oil and product tanker markets have turned, the company said in its quarterly report.
The company reported net profit of SEK28.1 million (USD3.3 million) in the first quarter of 2015 (1Q15), compared with a profit of SEK12.2 million in the same period last year. Revenues increased to SEK178.4 million from SEK135.2 million.
“The markets for the transport of both crude oil and refined products remained strong in the first quarter of the year,” said chief executive officer Kim Ullman.
“In most segments, the demand for transport capacity was strong, with freight rates that in some cases were the highest since 2008. Following three quarters of rising rates, we dare to state that the markets have turned.”
Expansion of refinery capacity in the Middle East and Asia had resulted in increasing shipments of refined products to Europe, which had increased the demand measured in ton miles. At the same, exports from the US were also increasing, with the same beneficial effect to the product tanker sector. “We have talked about this for a long time. Now it is happening,” Ullman said.
Given the firmer tone in the markets, Ullman said that the company planned to complement its own fleet of 13 vessels by chartering additional tonnage. Concordia Maritime currently owns 10 P-Max vessels of 65,000 dwt and a Suezmax tanker, and has just taken delivery of the first of two IMOIIMAX vessels of 50,000 dwt. In addition, it charters in two Suezmaxes.
The IMOIIMAX tankers are of the group’s own design and have twin screws and rudders for extra safety. Their extra width gives them greater cargo-carrying capacity than a conventional tanker of comparable length, but with lower draft.
The design originated from the now scrapped High Speed Sea Service (HSS) catamaran fast ferries of Concordia’s sister company Stena Line built in the mid-1990s and was first used in tankers with the two V-Max units that entered service at the turn of the millennium. They have since been sold.
Despite the improvement in profit in 1Q15, Concordia Maritime only generated a 1.6% return on equity, which is well below its 10% target. However, its solvency ratio of 43% at the end of the quarter exceeded its target by three percentage points.