Norway's Spar Shipping has reported a major blow to its bottom line, even before the pandemic delivered another hit this year.
The privately owned, Bergen-based shipowner said in its annual report for 2019 that as 2020 drew near, it experienced a near capitulation in the dry bulk market due to the impact of the trade war between the US and China.
Then things got worse in 2020.
Armageddon warning
"We did not know then that this was a warning about the Armageddon that would strike worldwide with the coronavirus," said the board, which is chaired by Dag Magne Vedvik.
Spar Shipping reported a pre-tax profit of $6.5m for 2019, down from $16.3m in 2018. Gross revenue dropped from $93.8m to $79m. At the end of 2019, the shipowner had a book equity of $172.6m.
Spar, owned by Tom Eide Knudsen and his brother Iwan, owns a fleet of 24 bulkers from 53,000 dwt to 64,000 dwt with an average age of about 10 years.
The company has traditionally operated as a tonnage provider concentrating on charters to solid counterparties, with some ships on agreements up until 2023. But in recent years, it has built up its own chartering division.
Spar is bank financed with loans running for just over five years. In the first quarter of this year, the company refinanced its debt with a new agreement running to 2025.
The board said it has a cautiously optimistic long-term outlook and believes it is well positioned to meet the challenges and possibilities that may come.
