German tonnage provider Ernst Russ has upped its earnings forecast after the sale of shares held by its second-biggest shareholder, Hamburg Commercial Bank (HCOB).

The bank sold its 16.1% stake in the shipowner after share prices peaked in the third quarter, Ernst Russ said in its quarterly earnings report.

Ernst Russ is listed on the Frankfurt Stock Exchange and the Hanseatic Stock Exchange, where its share price rose to a peak of €4.38 ($4.91) in September from €1.31 at the start of the year.

The sale of HCOB's stake means the free float of shares increased to 46.3%.

Ernst Russ, formerly known as HCI Capital, was partly taken over in 2017 by the Dohle Group, which remains the majority shareholder in the increasingly profitable Hamburg shipowner with its 38.2% stake.

Ernst Russ is selling the 12,744-dwt multipurpose vessel Lotta Auerbach (built 2007) for a gain of €5.2m.

It has a 51% stake in the vessel, which will be delivered to an unnamed party in December.

The transaction tops a profitable year for the company.

Revenues in the first nine months rose by 53% to €63.8m, compared with €41.8m in the same period last year.

Profit was €10.7m, up from €3.7m.

Earnings upgraded

Ernst Russ has upgraded its earnings forecast on the back of the strong container market.

Operating earnings (Ebit) for the full year are expected to be between €30m and €32m, an increase from the previous forecast of €24m to €26m.

Revenues are expected to be in the range of €85m to €90m for the full year.

Ernst Russ has a majority holding in 18 vessels and a significant interest in 12 others.

The fleet comprises container ships from 700 teu to 6,000 teu, a 38,000-dwt handysize bulker and two MPPs.

Average charter rates increased to $15,900 per day in the third quarter, up from $14,700 per day in the previous three months, mainly due to an increase in revenue from pool ships.

Charter agreements have been extended at the current market level, leaving just four vessels remaining on charter for periods up to 12 months

Three operate in charter income pools, while all others are on medium to long-term charters.

Ernst Russ expanded its fleet by two vessels late in 2020 and early 2021, which lifted operating earnings in the first nine months to €19.2m, up from €3.5m last year.

Ship assets rose by €6.9m to €126.6m.