Awilco LNG has found term work for its second LNG carrier at $30,000 more per day than it fixed the sistership for in the summer.
The Oslo-listed company said rates were weak between April and October due to Covid-19 demand hits.
They have "only lately started to climb following demand recovery reinforced by seasonal effects and the expectation of a colder northern hemisphere winter", the company said.
Profit expected to rise
The 156,000-cbm WilForce (built 2013) will be delivered on a 90-day time charter contract in late November at $80,000 per day.
In August, TradeWinds reported that the 156,000-cbm WilPride (built 2013) won a 110-day deal for late September with Indian Oil Corp at just over $50,000 per day.
Spot shipping rates are now above $100,000 per day.
"The current firm LNG spot shipping market is expected to improve the company’s financial results in the near term," Awilco LNG said.
WilForce and WilPride, the only vessels in the fleet, are financed with sale-and-leaseback deals with CCB Financial Leasing (CCBFL). They are chartered back on a bareboat basis for up to 10 years.
The bareboat rate for the remainder of 2020 is fixed at $39,000 each.
Awilco LNG's net loss was $6.5m in the third quarter, from a loss of $1.06m a year ago.
Revenue dropped to $3.7m from $6.7m, while the Ebitda loss was $485,000 against a profit of $7.4m in 2019.
Vessel utilisation was unchanged at 99% from the second quarter.
Positioning fees knocked $1.9m off the bottom line.
Covenant risk
Norwegian investment bank Fearnley Securities said the Ebitda result was $1m below expectations.
Cash at the end of the quarter stood at $8m, which was $6m above the temporary minimum covenant level set to expire on 31 December.
After this, the covenant will return to $10m, "meaning there is a risk of Awilco LNG not complying [with] the original terms of the CCBFL lease terms", Fearnley said.
Awilco LNG said it is in dialogue with CCBFL and is continuously assessing alternatives to resolve the situation.
"Gas price forward curves together with LNG forward freight agreement levels are both indicating a firm LNG shipping market the next few months," it added.
"In the longer term, tonnage demand and supply appear balanced following new liquefaction capacity under construction and an orderbook which is currently not sufficient to meet the transport requirements from these new volumes."
