Hoegh Autoliners is looking to implement a surcharge to offset lost volumes from longer voyages around the Cape of Good Hope.
Amid a strong quarterly result — profits hit $197m, up from $118m for the same period last year — the Oslo car carrier owner said volumes were flat in the fourth quarter, slightly down in January and likely to fall further as it sends its ships away from the Red Sea.
“All of our sailings were full, and we continued to maintain strong rates as a result of successful contract renewal and continuously strong spot market,” chief executive Andreas Enger said.
“On the other hand, the Red Sea situation adversely impacts on our capacity and volumes from longer sailing, and we are working systematically to offset the loss with cargo repricing and surcharge implementation.”
For the last three months of 2023, Hoegh Autoliners earned net rates of $83.40 per cbm while transporting 4m cbm, helping it to $382m in revenue, up from $356m year over year.
But like fellow Norwegian owners Wallenius Wilhelmsen and Gram Car Carriers, the company decided in December to reroute ships south around the Cape of Good Hope following a spate of attacks by Houthi militants on commercial shipping in the Red Sea.
While the move is expected to boost rates for contracts coming open in the near term as the longer voyages eat up cargo capacity, it is expected to lower volumes.
In January, Hoegh Autoliners said it transported 1.1m cbm of cargo, down from 1.3m cbm in December and November.
Net rates, though, hopped to all-time highs of $85.40 per cbm in January, higher than the $82.10 per cbm earned in December and the $83.60 per cbm in November.
The company also announced a new dividend policy alongside its quarterly results.
It will now pay out roughly all cash left over after amortisation of debt facilities, capital expenditures and payable taxes.
For the quarter, the dividend will total $360m.
Enger said following AP Moller-Maersk’s decision to divest its 20m shares in Hoegh Autoliners at NOK 90 ($8.50) per share in November, existing investors bought them up.
Since the end of November, shares have risen from NOK 89.40 to NOK 105.80 at the close on Wednesday.
