Norwegian VLCC owner ADS Crude Carriers has made back 30% of its scrubber retrofit costs in just two months.
The company completed installations on its three tankers earlier than expected last year and has saved $3.6m so far this year by using heavy fuel oil rather than the more expensive low-sulphur bunkers. The retrofits cost $12m in total.
ADS also spent $10.5m on intermediate vessel surveys, which were previously estimated at $7.5m.
The yard stays accounted for 25% of vessel days in the fourth quarter.
Chairman Bjorn Tore Larsen said: “During the fourth quarter, the company completed its vessel upgrades ahead of implementation of IMO 2020."
Negative net result
Despite the savings, the company ended the fourth quarter with a net loss of $470,000, compared with a profit of $2.91m in the same period of 2018.
Depreciation increased to $3.5m, compared with $1.3m a year ago.
Revenue was up at $12.38m from $10.46m, but operating costs also rose.
Time charter equivalent (TCE) earnings rose to $30,886 per day, up 25% year on year.
ADS is paying a dividend $0.09 per share for the final three months, or $2m in total.
It has a charter backlog of 70% of ship days for the first quarter. This coverage is at an average TCE rate of $85,000 per day.
Tore Larsen added: "The past months have reminded us that the tanker market is unpredictable and volatile, as we have seen huge movements in reported market rates.
"While we make no predictions about the market going forward, what I can predict is that we will continue to deliver on our promise to shareholders to pay out excess cash in the form of quarterly dividends.”
During the quarter, its shareholders SFL Corp and Arendals Dampskibsselskab agreed a new loan to the company worth $7.5m as a working capital buffer.
