Japan’s Kyoei Tanker has reported a first-quarter loss on the back of a depressed tanker trading market.

The Tokyo Stock Exchange-listed shipping company said it increased sales by 7.6% to ¥3.31bn ($24.5m) in the three months to the end of June, compared with the same period last year.

Ordinary profit slumped 70% to ¥71m, and it made a net loss of ¥22m, compared with a profit of ¥10.6m in the first quarter of 2021.

Kyoei said its main VLCC market continued to struggle.

Demand for oil transportation remained low, while there was little demolition, which maintained the size of the fleet at more than 850 vessels.

It said the oil products market has been volatile as a result of the conflict in the Ukraine.

However, the LPG market has benefited from strong demand in Asia.

The panamax market, it added, was hit by lower grain production levels in the US.

Kyoei said it has been making adjustments to its fleet. It recently sold two product tankers and took delivery of the 312,500-dwt VLCC Tokiwa (built 2021) and 8,962-cbm LPG carrier Marie (built 2022).

Purchase option

It is also set to dispose of its 58,100-dwt bulk carrier Sagar Moti (built 2012) this year. Kyoei said the vessel’s operator, listed as Lyra Maritime, will exercise a purchase option at the end of the charter contract. VesselsValue estimates the ship has a market value of $22.38m.

The value of the purchase option has not been disclosed.

Kyoei operates a diverse fleet of tankers, gas carriers and bulkers, including seven VLCCs, two VLGCs, two LPG carriers, four panamax bulkers and a product tanker.