Bangkok-listed Thoresen Thai Agencies has credited a strong performance of its dry bulk fleet for profitable first quarter of its 2021 financial year.

The company earned a net profit of THB 189.1m ($6m) during the quarter, a significant improvement in the THB 596m during the corresponding quarter of 2021.

Thoresen also noted a strong improvement of its offshore business, although it remains in the red.

Thoresen said average time charter equivalent rates of its bulk carrier fleet grew by 46% year-on-year as the Baltic Dry Index and bulker earnings during the quarter reached their peak in a decade as dry bulk-trade volumes rebounded strongly.

Dry bulk shipping contributed 50% of Thoresen’s consolidated revenue, which rose 5% year-on-year to reach THB 3.4bn.

Chalermchai Mahagitsiri, Thoresen’s president and chief executive officer said maritime advisors Liengaard & Roschmann had recently ranked its dry bulk arm Thoresen Shipping, which operates a fleet of 24 ultramax and handymax bulkers, in second place in its vessel index of 23 other listed dry-bulk companies based on their time charter earnings for 2020.

“Looking forward to the second quarter of this year, there will be other seasonal factors to help boost dry bulk trade, such as US corn exports, as well as President Joe Biden’s economic stimulus and infrastructure packages that benefit commodity demand, hence freight rates. Therefore, the full-year 2021 outlook is very positive, but uncertainty remains,” he said

Mermaid looking good

Mermaid Maritime' order book reached a new record high of $241m at the end of the quarter, Photo: Mermaid Maritime

Mahagitsiri described Thoresen's offshore arm, Singapore-listed Mermaid Maritime, as having gotten off to a good start for 2021, with its order book reaching a new record high of $241m at the end of the first quarter, of which $111m is expected to be delivered in 2021..

“In addition, as it has explored new opportunities in cable laying, it commenced two high margin offshore projects in the first quarter, and this, in part, led to the improvement of its performance,” he said.

Mermaid earned revenue of THB 565.8m during the first quarter, contributing 17% of Thoresen’s consolidated revenue.

An improved cost base and better margins for vessels and cable laying projects saw gross profits improve 147% year-on-year to THB 53.3m.

However, while the offshore service business reported a net loss of THB 72.7m, this was a 60% improvement over the first quarter of 2020.

Mahagitsiri said that the outlook for subsea service providers remains positive on a medium to longer-term basis.

“Capital investments by oil producers are expected to continue, and these are core markets to the offshore service segment. The shift towards natural gas and renewable sources of energy outside of Europe is expected to provide an increase in the number of work opportunities for the segment as well,” he said.

Thoresen’s agrochemicals business, which contributed 15% of consolidated revenues during the quarter, was reported to remain profitable despite a drop in fertilizer sales.

The remaining 18% of its consolidated revenues came from its extensive investments in water production in Thailand and Laos, and a 70% stake in Taco Bell Thailand, a popular chain of Mexican fast-food restaurants.