Seaboard said it finalised a newbuilding order worth $180m as it reported a surge in third-quarter earnings.
The New York-listed company, which is the parent of ship operator Seaboard Marine, said in a securities filing that it signed contracts to build the vessels at a price of $60m each. They are scheduled to be delivered in 2024.
The quarterly filing provided scant details of the order, without even mentioning what type of ship had been booked. A company spokeswoman could not be immediately reached for comment.
Seaboard said it spent $65m on the first instalment for the newbuildings and to make a payment on a vessel purchased on the secondhand market, although it did not identify that ship.
It said it intends to pay for its capital expenditures from a combination of cash, short-term investments and debt.
The Kansas company, whose interests range from food to fuel and liner shipping, reported operating income for its marine transport segment of $42m for the three months to 2 October — a 200% increase on the $14m booked in the same period last year.
Marine transport revenue grew to $343m, up from $244m in the third quarter of last year.
"The increase for the three-month period of 2021 was primarily the result of an increase in average freight rates due to strong demand and low capacity of ships and higher cargo volumes," Seaboard said.
Miami-based Seaboard Marine operates containerships and multipurpose ships on liner services linking the US to the Caribbean and Latin America. Another unit, Seaboard Overseas, also controls a fleet of bulkers, according to Clarksons.
Pork beats shipping
The improved quarterly results in Seaboard's shipping business lifted its nine-month operating income to $95m, reversing a $3m loss in the first three quarters of 2020.
While shipping markets have been hot in the third quarter, pork products remained more profitable, thanks to strong margins. That unit delivered $52m in operating income compared with $14m earned a year earlier.
Overall, Seaboard reported $94m in net profit during the third quarter, a decline from $154m in the same period of 2020. Net sales rose to $2.28bn, topping the $1.65bn booked a year earlier.
