Epic Gas returned to profit in the third quarter helped by a rising market and is confident a major fleet renewal project is set to be reflected in the bottom line.
Epic, which is listed on Oslo’s Merkur Market, outperformed expectations in the three months to the end of September, with analysts noting the results were stronger than forecasts on each key line of the balance sheet.
Exciting quarter
Charles Maltby, chief executive of Epic, told TradeWinds: “This is the first time the company has made a profit in recent times after the past four or five years of a very bad market and the business going through a heavy growth phase. It’s an exciting quarter for everybody in the business and also for the shareholders.”
The pressurised LPG carrier specialist booked a profit of $1.3m during the quarter, overturning a loss of $5.7m a year ago.
The company, which has a fleet of 38 vessels, was helped by an 18% year-on-year increase in revenue to $40.8m.
Analysts at Norne Research said the figures were very strong due to solid cost controls and described the return to profit as a milestone for the company.
Record high
“All the main metrics not only beat our estimates but were a record-high for the company with significantly growing revenues and well-controlled costs,” Norne said. “Positive bottom line was also reached quicker than we predicted.”
Despite the return to the black, Maltby said a dividend for shareholders is “still a little way off”. However, with supply growth forecast to be comfortably outflanked by improving demand in the coming years, he expected the upward trend in rates to continue.
Epic took delivery of the final ships in a 17-vessel newbuilding programme last year and has also been investing in larger vessels.
Fleet changes
Maltby noted the fleet profile has changed materially during the past four years.
“Whereas we used to be invested in 3,500 to 5,000 cbm where earnings can range up to maybe $10,000 per day in a good market, we are now also invested in 7,000, 9,000 and 11,000 cubes and earnings on those ships in a good spot market can go up to maybe $20,000 per day,” he said.
“Our average vessel in cubic terms has moved by 35%. That means we are now exposed to a slightly different market space and a slightly different earnings profile. That should mean we can deliver some very interesting results in the years ahead.”
