Havila Shipping has halved its second-quarter loss compared to last year, but a dozen of its vessels still face the prospect of being repossessed or sold off by lenders.
The Oslo-listed shipowner recorded a loss of NOK 57.5m ($6.4m) during the three-month period, compared to a NOK 133.1m loss at the same point in 2018.
This resulted in a diluted loss per share of NOK 2.42, compared to a NOK 6.02 loss in the same quarter last year.
Freight income was up by 25% year on year to NOK 182.9m in the second quarter.
Total operating income for the group was NOK 191.3m, an increase of 23% compared last year.
While revenue has increased, Havila is also benefitting from paying less for its financial commitments than last year.
This has resulted in positive net cash flow from operations this year to date, which totalled NOK 47.3m as of 30 June, compared to negative NOK 35.9m at this point in 2018.
Stress test
Twelve of Havila's owned vessels are still defined as "non-performing" in accordance with its current restructuring agreement.
"The company is now negotiating with the lenders with the goal of reaching an agreement that ensures that the company’s fleet is kept together as far as possible," Havila said in its second-quarter financial report.
Havila began a new round of negotiations with its lenders in April after 12 of its vessels failed to pass a six-month stress test.
For the affected vessels, interest payments have been postponed for interest accrued since 1 March until the "alternative" courses of action in the 2017 restructuring agreement are clarified or are renegotiated.
These "alternative" strategies could see lenders taking ownership of vessels and cancelling the related debt; or vessels may be sold, where any uncovered debt will be converted to shares.
If not, part of the restructuring agreement may be renegotiated to find other ways of reducing the company's debt, the report said.
Vessels were deemed to have failed the stress test if they generated EBITDA of less than 2% of their respective debt.
On a slightly brighter note, no further impairment of vessels was recorded during in the first half of 2019, but previous write-downs have been maintained, Havila said in its financial report.
Significant impairment charges of vessel values were made in fourth quarter of 2018.
Fleet breakdown
Havila operates 23 ships, comprising three subsea construction vessels; five anchor handlers, 14 platform supply vessels (PSVs) and a multi-field rescue recovery vessel (RRV).
Five PSVs are operated under management agreements for other owners and the RRV is leased.
The group had three anchor-handlers in lay-up at the end of the second quarter.
Aside from these laid-up vessels, Havila said its fleet utilisation was 85% during the three months.
