Uglands Rederi was hit hard by poor bulker markets last year, but an upturn in freight rates has set the Norwegian shipowner on a steadier path, ahead of a handover in leadership.
Jorgen Lund, chairman of the group, which is also known as The JJ Ugland Companies, said in its 2020 report that the shipowner is "well positioned" for the future.
"The weak shipping markets in 2020 are reflected in our financial results which ended with a small deficit," he said.
"This year we have already fixed some of our bulk carriers on time charters at acceptable rates, and we expect better financial results for 2021 and onwards."
Bulker demand was affected by the Covid-19 pandemic during the first six months of 2020, which weakened Uglands Rederi's annual result.
Its pre-tax loss of NOK 36m ($4.3m) last year compares with a NOK 66m profit in 2019.
Leadership of Uglands Rederi will be handed to Knut Nicolai Tonnevold Ugland in the third quarter this year.
Fleet renewal
The Grimstad-based group owns a diversified fleet, dominated by supramax and ultramax bulk carriers, and completed its fleet renewal programme last year.
- 14 bulkers, mainly supramax and ultramax vessels
- 1 icebreaking special bulker
- 2 shuttle tankers
- 2 oil/chemical tankers
- 2 platform support vessels
- 12 barges
- 2 tugs
- 1 crane vessel
- 1 cargo/passenger ferry
The owner has taken delivery of four ultramax bulker newbuildings between 2017 and 2020 and sold off tankers and older vessels.
Only a couple of its bulkers were on long-term charters at the beginning of this year, leaving the rest of the fleet exposed to the strong spot market for supramax and ultramax bulkers, which this week hit multi-year highs.
One of Uglands' supramaxes — the 57,500-dwt Ellenita (built 2015) — has been fixed for five years to Singapore's Diamond Bulk Carriers, which is part of Mitsubishi Corp. The daily rate was not disclosed.
The Norwegian owner also has some ships on shorter time charters and on index-linked contracts, the report said.
Last year, Ugland sold its two oldest bulkers — the 52,300-dwt Favorita (built 2005) and sistership Rosita (built 2004) — to Worldera of Singapore for $13.8m en bloc.
Asset values
Bulker values have also soared sharply this year, which has aided Uglands' balance sheet.
VesselsValue says the combined market value of JJ Ugland's 14 bulkers increased by $96m in the first five months of 2021.
Last year, the company sold its only tanker — the 125,000-dwt shuttle tanker Vinland (built 2000) — for demolition after it completed its long-term charter to Equinor.
Chief executive Oystein Beisland said: "We do not rule out future investments in tankers."
Uglands Rederi also owns offshore vessels, barges and the Norwegian shipyard Nymo.
Heir apparent
Before he died in 2010, owner Johan Jorgen Ugland decided that his grandson Knut should inherit the company and take over at the age of 35.
An advisory board selected by Knut's grandfather has been running the company in the meantime.
Knut has participated actively on the boards of Ugland group companies for a long time and has worked for the Swire Group in Singapore and for Oldendorff Carriers.
