KSS Line has returned to Hyundai Heavy Industries for another VLGC newbuilding, as the value of its sisterships on order at the yard has risen.
The South Korean gas carrier and chemical tanker owner has booked a 84,000-cbm vessel to be delivered in the third quarter of next year.
The contract brings the Seoul-based company's VLGC orderbook at the yard to five.
Order confirmation
A KSS executive confirmed the newbuilding contract, saying the VLGC was signed on the back of a seven-year charter with Dubai-based BGN International DMCC.
He declined to disclose the cost of the scrubber-fitted ship, but said it won a competitive price from the yard. The company’s previous VLGC newbuildings were reported to have cost about $74m each.
At this price, the latest deal would bring KSS' orderbook to almost $300m. But VesselsValue shows the value of a VLGC newbuilding has risen significantly since KSS' initial order, with the newbuildings now worth about $85m, excluding the impact of attached charters.
“All our VLGCs will be fitted with scrubbers and they are able to transit the old Panama Canal,” the KSS executive said. “Of the five newbuildings, four are chartered out to BGN. The other ship is employed by Vilma Oil of Spain.”
Long-term deals
BGN has chartered two vessels for five years, plus options to extend for up two years. The other two ships, including the latest newbuilding, are on charters to BGN for seven years.
HHI, which is the flagship yard in the Hyundai Heavy Industries Holdings stable, is slated to deliver the quartet from the first quarter of 2021.
Vilma Oilhas fixed its 84,000-cbm newbuilding for five years, plus options to extend for up to two years, at $830,000 per month. The VLGC is due to be delivered in early 2021.
Listed on the Korea Stock Exchange, KSS controls a fleet of 27 LPG carriers, LNG carriers and chemical tankers.
The company disclosed that it raked in KRW 231bn ($23.4bn) of sales last year. Its operating profit increased by 12.4% to KRW 52.9bn in 2019 compared with KRW 47.1bn in the previous year. KSS’ debt ratio was down to 240% from 2018’s figure of 262%.
“When all five VLGC newbuildings [are] delivered in 2021, we are expecting our sales volume to exceed KRW 300bn,” KSS said.
