Danish tanker owner Nordic Shipholding has revealed more impairments as it wrote down the value of the fleet during a period of falling rates.
The Knud Pontoppidan-chaired product carrier specialist said that following a strong product tanker market in the first half, the sector softened significantly going into the second half.
"This impacted earnings but even more so, the build-up of products in storage, the declining demand and the continued uncertainty in relation to the Covid-19 pandemic, resulted in a very soft secondhand market with declining values for all tanker segments including product tankers," the company added.
Nordic put the 38,000-dwt Nordic Hanne (built 2007) up for sale in August as it looked to bolster its finances.
The shipowner had already booked an impairment loss on the tanker of $2m in the first half.
Secondhand woes
"Given the softening secondhand market an additional impairment loss of $2.2m will be recognised in Q3 [the third quarter]," Nordic added.
The net carrying value of the remaining fleet has also been reassessed and an additional impairment loss of $6.5m accounted for.
The five ships, comprising the Nordic Hanne, three MRs and an LR1, will continue to operate on a pool basis.
Meanwhile, Nordic said its time-charter equivalent revenue for 2020 is expected to be about $27m to $29m, down from a forecast of between $28m and $31m previously.
Ebitda should come in at $13m to $15m, against $14m to $17m in the company's last update.
The loss before tax is projected to be somewhere between $5m and $7m, revised down from a profit of $2.5m to $5m.
Nordic remains in talks with lenders to reorganise its loans.
Merger talks delayed
Parallel talks to find a potential merger partner have been affected by the Covid-19 outbreak.
The management, together with majority shareholder Nordic Maritime, had started merger discussions with a prospective partner entity in late 2019.
Nordic has liabilities of $90.2m maturing at the end of 2020.
As part of a loan restructuring agreed in 2018, quarterly instalments were deferred to December this year.
