The strong winter market has helped shipowner Awilco LNG achieve the highest quarterly average time-charter equivalent (TCE) rate in its history.
The Oslo-listed company achieved a TCE rate of $90,000 per day in the first quarter for the 156,000-cbm LNG carriers WilPride and WilForce (built 2013), which have tri-fuel diesel-electric propulsion.
News of the record-breaking quarter came as Awilco reported a net profit of $6.9m for the first three months of the year, up from the $2.7m achieved 12 months earlier.
The company said it achieved net freight income of $16.2m, a near 16% year-on-year increase on the $14m seen in the first quarter of last year.
Awilco chief executive Jon Skule Storheill told investors that demand for LNG was rising as “consumers become more aware of its environmental benefits versus primarily coal”.
He added that the company faces further potential upside from an expected rebound in freight demand as the pandemic “softens its grip on the global economy”.
In April, Awilco secured a 12-month charter for the WilForce with an estimated Ebitda contribution of $18m over the period.
Storheill said the fixture will “secure positive cash flow and strengthen the company’s financial position over the period”.
Coronavirus impacts
Awilco said that while coronavirus had not negatively impacted the operational performance of its two vessels, crew changes remain “more challenging and costly than normal”.
The shipowner said the pandemic had had a “serious impact” on LNG demand in 2020 that was otherwise expected to increase by about 20 million tonnes per annum.
“From a year-over-year perspective, there is a significant shift in import patterns due to the Covid-19 pandemic, with Chinese imports up 5m tonnes compared to the first quarter of 2020 and European imports down 10m tonnes at the same time,” Awilco said.
The market recovery being seen in April and May is being attributed to a combination of strong LNG demand caused by continued cold weather and restocking.
“Many market participants [are] taking early cover for next winter, leading to very high activity for mid-term charters and increasing rates,” the shipowner said.
Awilco said newbuilding orders have been moderate so far this year with just two contracted.
The current orderbook stands at 101 LNG carriers, or about 19% of the current fleet of 530 vessels. The company added that only 14 of those vessels were available.
