Norway’s Awilco LNG has seen profit jump in the fourth quarter as vessels took the long route around Africa to avoid Red Sea attacks.
The Oslo-listed owner of two LNG carriers was also boosted by the settlement of a claim arising from a collision in 2019.
Net profit was its best ever at $14.9m, against $4.9m in the same period of 2022.
Freight income grew to $22.2m from $16.2m as rates rose due to the higher tonne-miles arising from the Houthi chaos in the Middle East.
The annual result was also a record at $38.2m.
Vessel use was 100% for the fourth quarter, with net time charter equivalent earnings coming in at $120,600 per day, up from $119,500 in the three months before that.
Awilco LNG is paying a dividend of $1 per share.d
Chief executive Jon Skule Storheill said: “Following the second special survey and dry-dock in the third quarter, both vessels resumed their time charter contracts and generated full earnings without any off-hire in the fourth quarter.”
“With both vessels on fixed-rate contracts through first-half 2024 we can expect earnings to be in line with first-half 2023,” he added.
Awilco LNG said the winter market surprised somewhat on the low side this year, as most receivers were well-stocked and temperatures relatively mild.
Rates rebound
As gas prices fell, more price-sensitive buyers entered the market and picked up more volumes.
“With a halt in LNG transport through the Suez Canal and very limited sailings through the Panama Canal, utilisation is going up at the start of 2024 and rates have rebounded somewhat on spot,” the company said.
This has been more pronounced for term charters, with the one-year rates for TFDE ships quoted around $60,000 to $65,000 per day.
“The short-term market has also improved from the recent lows, although the large orderbook and limited new production capacity in 2024 does require an increase in tonne-miles to improve rates,” Awilco LNG added.
The company has a vessel coming free from charter in the third quarter this year.
“We are well positioned for the next winter period when rate levels should improve,” the owner said.
Awilco LNG has banked $5m as a settlement after years of legal action over a 2019 collision off Singapore.
Its 156,000-cbm WilForce (built 2013) was involved in a clash with the 39,300-dwt open-hatch bulker Western Moscow (built 2019).
The gas carrier, which was in ballast, spent months under repair.
Awilco LNG has always maintained its ship was hit by the bulker.
The cash was paid as compensation for costs and lost time following the collision.
