Newcastlemax owner 2020 Bulkers has posted its biggest ever quarterly profit and its largest dividend to shareholders for the third quarter of 2021 on the back of rising freight rates.
The Oslo-listed shipowner reported net income of $21.6m for the three-month period, equivalent to 98 cents in earnings per share.
This is up from $4 .8m in the third quarter of 2020.
The firm has declared total cash distributions of $0.97 per share for the months of July, August and September.
The shipowner paid out a total of $37.5m in dividends during the first nine months of 2021.
It has declared dividends or cash distributions for 15 consecutive months.
Fleet earnings
2020 Bulkers' vessel revenue during the third quarter totalled $33.9m, more than double the $16.3m earned during the same three months last year.
This equates to gross average time-charter equivalent (TCE) earnings of about $46,000 per day during the period this year.
These earnings have risen to around $65,500 per day during the fourth quarter so far, the company said.
All eight of 2020 Bulkers' newcastlemax bulkers are fixed on index-linked period charters to major commodity traders.
Six are on charter to Koch Logistics and the other two are contracted to Glencore.
In September, the index-linked charters for the 208,400-dwt vessels Bulk Shenzhen and Bulk Sydney (both built 2020) were converted to fixed-rate contracts at $61,628 and $60,260 per ship per day for the final two months of 2021.
Both vessels are chartered to Koch until 2020 and are earning a profit share, based on the fuel-cost savings from the scrubbers fitted onboard.
Analyst reaction
2020 Bulkers beat the consensus estimate for net profit by $2m and the earnings-per-share estimate by 6 cents.
Its 97-cent dividend was much more than expected, compared to the consensus estimate of 87 cents per share.
The shipping equities research team at Norway's DNB Bank said that much of the results had been pre-announced and were line with the adjusted consensus' expectations, which should limit estimate revisions.
"Furthermore, a large portion of fixed time-charters for the remainder of 2021 leave limited unknowns in our view," the team said in a note on Wednesday.
"Hence, the results should warrant a neutral share price reaction in a flat market."
2020 Bulkers' shares were trading at NOK 118 during mid-morning in Oslo, down by 4.5% since the market opened.
Collisions costs
The company's third-quarter results also reveal that a collision involving one of its vessels has cost $2.8m.
The 208,400-dwt Bulk Shenzhen (built 2020) collided with a Reuben Brothers-owned bulker in August while laden on the Yangtze River in China, with a pilot onboard. There was no harm to personnel or the environment.
The vessel was off-hire for 14 days while it underwent inspections and repairs in China.
The costs were incurred in insurance deductible, off-hire, as well as the difference between the vessels' off-hire insurance of $35,000 per day and the prevailing index rate.
