D’Amico International Shipping reports first half results, says product tanker market in on the path of recovery

US$ 95.1m in H1’14 (US$ 48.6m in Q2’14) vs. US$ 99.3m in H1’13 (US$ 49.2 in Q2’13). Results were clearly affected by the weaker than expected product tanker market of the first months of 2014, mainly due to 2 seasonal effects: i) the harsh winter in the US, which increased domestic consumption of oil products, thus reducing export, and ii) the closure of several refineries in the US Gulf for maintenance, which took longer than expected and led to a further fall in American exports. These are only temporary and unexpected disruptions, which do not change the positive market fundamentals and DIS positive outlook on the medium term. The spot market showed clear sings of recovery in the month of June especially in the US Gulf, and it is gaining further momentum going into Q3 EBITDA – US$ 14.2m in H1’14 (US$ 10.4m in Q2’14) vs. US$ 32.5m in H1’13 (US$ 21.8m in Q2’13). The decrease
compared to the same period of 2013 is mainly due to the different capital gains realized in the two years (H1/Q2’14: US$ 6.4m vs. H1/Q2’13: US$ 13.9m) and to the relatively weak product tanker market experienced in the first months of 2014 Net Result – Loss of US$ 5.5m in H1’14 (profit of US$ 1.4m in Q2’14) vs. profit of US$ 17.7m in H1’13 (profit of US$
13.9m in Q2’13)

The product tanker market appears to be now on the right track for a recovery after a
weaker than expected H1’14.

Spot – In a challenging scenario, DIS was still able to outperform the market, generating a Daily TCE Spot of US$ 12,677 in H1’14 compared to Clarkson’s ‘2014 YTD Clean MR Average Earnings’ of US$ 9,650 at the end of June.

At the same time, Q2’14 Daily TCE Spot was US$ 13,144, almost US$ 1,000/d higher than the Q1’14 and around US$ 300/day better that Q4’13

Coverage – Proven commercial strategy of DIS allowed to mitigate the short term weakness of the market thanks to a high coverage of 55.6% at an avg. daily rate of US$ 14,707. Such good level of coverage benefited also from 4 newbuilding vessels delivered in Q1 and TC-Out to 2 Oil Majors at profitable levels.

Half of DIS’ newbuildings have already been fixed on long term TC contracts with 2 Oil Majors and a leading Refining Company, all at very profitable levels.

Source: d’Amico International Shipping