MPC Container Ships (MPCC) boss Constantin Baack has predicted strong markets will last into 2023 as he revealed a huge profit from a sale of six smaller boxships.
The chief executive of the Oslo-listed shipowner said he has noted more firm charter rates being secured over the past couple of weeks, while fundamentals for the rest of this year, 2022 and 2023 remain "very solid".
Speaking on a conference call with analysts, Baack said demand growth will be good next year, with tonnage supply staying tight, particularly for the smaller vessel sizes that MPCC operates.
Port and hinterland congestion is set to continue, he believes.
Baack admitted chartering activity is down from the summer, purely because there are fewer ships available to fix.
And he said asset values are closing the gap to charter values, meaning care must be taken when entering into transactions.
MPCC has announced the sale of six feeder vessels for $135m, as well as $180m of new financing to replace bank loans and pay a $204m bond as it eyes dividend hand-outs.
Massive profit
Baack said the ships are the 1,036-teu Anne Sibum (built 2007), Stefan Sibum (built 2009) and Grete Sibum (built 2008), the 1,296-teu AS Federica and 1,284-teu AS Faustina (both built 2007) and the 1,496-teu AS Riccarda (built 2012).
These six were acquired for $64m, leaving MPCC with a staggering profit of $71m.
Baack told analysts that some of the sextet were acquired when it bought the Songa Container fleet this year.
Some of the ships are coming off charters, while others have been sold to their charterers.
Brokers reported the Anne Sibum as bought by French giant CMA CGM, while the AS Riccarda went to Mediterranean Shipping Co.
The Grete Sibum was reported fixed in May for a year to Unifeeder at $11,950 per day.
As for more sales, Baack said MPCC is weighing whether to dispose of vessels or renew charters, given strong rates.
"There is a certain pool of vessels that can possibly be developed for sale. We are considering that," he added.
He described the sale of the six ships as a "strategic" decision based around their docking cycles: "We can rule out newbuildings at this point in time. Our goal is to return capital to investors."
MPCC gave two examples of recent charter strength. The 2,741-teu AS Constantina (built 2005) was fixed for three years at $40,000 per day, while the 1,296-teu AS Fiorella (built 2007) achieved $26,000 per day over the same term.
Baack sees the opportunity to forward-fix ships and the company has signed some charters for the first quarter of 2022 already.
He said MPCC is also in talks to fix ships for the second and third quarters.
And such is the strength of the market, he added, there might not be any significant discount to current rates in these forward deals.
