Bulker owner Grindrod Shipping has posted a first quarter loss of $4.3m as the Singapore-based company succumbed to the weaker dry freight rates.
Twelve months ago, the US and South Africa-listed company posted a net profit of just over $29m for the corresponding period.
“Charter rates decreased given the seasonally weak start to the year, compounded by a particularly early Chinese New Year,” said recently appointed chief executive Edward Buttery.
“If the market strengthens, as we anticipate it will in the lead-up to summer, then we will look to increase cover on a portion of the fleet.”
Revenue for the quarter ended 31 March 2023 fell to $76.8m from the $110.3m seen 12 months earlier. This was partially offset by a reduction in vessel operating expenses.
During the first quarter, Grindrod said its handysize and supramax/ultramax bulkers earned a timecharter equivalent (TCE) per day of $9,491 and $12,869, respectively.
“Revenue decreased due to weakening market conditions in the dry bulk business and a reduction in short-term operating days that was partially offset by the revenue generated from the sale of a supramax/ultramax vessel in the first quarter of 2023,” Grindrod said.
The shipowner also said short-term operating days decreased due to the redelivery of short-term chartered vessels due to reduced demand for dry bulk tonnage brought about by a global slowdown in GDP growth and higher interest rates.
During the quarter the company agreed the sale of three vessels — the handysize bulkers IVS Sentosa (built 2010), the IVS Kestrel (built 2014) and the ultramax IVS Pinehurst (built 2015) — in line with its commitment to reduce debt.
At the end of the quarter Grindrod’s fleet comprised 29 vessels made up of 14 handysize and 15 supramax/ultramax bulkers which are either owned or long-term chartered-in.
Buttery, who took up the post of Grindrod CEO at the end of March 2023, said he had been delighted with the collaboration between both Grindrod and his London-listed company Taylor Maritime Investments.
“I’m confident there is significant room to improve margins once the integration of our business and operations is complete,” he said.
