Norwegian VLCC owner ADS Crude Carriers has revealed a jump in the cost of its scrubber programme in China.
The Oslo-listed company said the total expected investment in cleaning systems and taking its three tankers through intermediate surveys is about $6.5m per vessel, up from the previously guided $5.5m.
The change is mainly due to increased estimated costs necessary to maintain the highest-level vessel rating, it added.
Chairman Bjorn Tore Larsen said: “As planned, subsequent to quarter end we have seen two of our vessels go into yard to perform mandatory intermediate surveys and retrofitting of scrubbers, with the third vessel expected to enter yard around the end of September.
"The yard stays remain on schedule with two expected to finish before end of Q3 2019 and one during Q4 2019. Following completion of the dockings all of our vessels will be well positioned to take advantage of the impact of the impending IMO 2020 regulations."
Approximately 50% of vessel days in the third quarter are expected to be related to intermediate survey and scrubber fitting.
“The yard stays will reduce available revenue generating days in the third quarter, while we have secured estimated backlog for 45% of vessel days in Q3 2019 booked at an average TCE per day of $20,000," Larsen added.
Profit down in second quarter
ADS announced second quarter net profit of $0.6m, down $1.2m from the first quarter.
It is paying out $0.5m of this as a dividend.
Revenue fell $1.7m or 27% from the first quarter due to a 28% reduction in time charter equivalent earnings to $17,463 per day.
Larsen said: “The seasonally weak tanker market impacted our second quarter earnings."
It was the second successive quarterly dividend, with the annualised yield at 6%.
Larsen added: “The general market sentiment appears positive for the near term future and into next year.
"Our immediate focus is on completing the ongoing vessel dockings on schedule and we look forward to taking delivery of our upgraded vessels after which they will immediately commence in the spot market where we believe they will be best positioned for generating returns to our shareholders.”
