Connecticut-based Chembulk Tankers posted a wider loss during the first quarter, but its underlying performance held firm despite the coronavirus pandemic.
The chemical tanker owner recorded a net loss of $39.5m, including $34m from the sale of three vessels that was announced in February. Its net loss amounted to $9.46m in the same period of last year.
Net revenue fell slightly to $49.3m from $49.6m.
Arctic Securities said the quarterly results were in line with its expectations as the company’s tanker earnings remained at similar levels to the fourth quarter of 2019.
But the brokerage warned: “Covid-19 is adding an unprecedented level of uncertainty, with the potential for increased competition from product tankers in the second half of 2020.”
Freight rates of chemical tankers often move in tandem with product tankers, whose earnings spiked to all-time highs in April before sharp correction.
The volatility has been driven by floating storage demand that is linked to the recovery pace of oil consumption during the outbreak.
“Looking forward, Covid-19 impacts continue to add unprecedented levels of uncertainty to the global economic outlook and vessel demand going forward,” Chembulk said in a quarterly update filed on the Oslo Stock Exchange.
“The extent to which Covid-19 will impact the company's results of operations and financial condition, including possible vessel impairments, will depend on future developments, which are highly uncertain and cannot be predicted.”
According to estimates of Maritime Strategies International, the utilisation rate of global chemical tanker fleet will fall to 83.2% this year from 85% in 2019.
But Chembulk envisages some support from the supply side, saying annual fleet growth will moderate to 2% or less in 2020 and 2021.
The private equity-backed owner has seen a series of corporate changes this year.
In January, Chembulk promoted chief financial officer Bart Kelleher to become chief executive after the departure of David Ellis. It also named Arthur Regan executive chairman of the board.
The company in March agreed to enter its entire chemical tanker fleet into commercial pools managed by Womar Logistics.
Three vessels have joined the pools by 31 March and the remaining are expected to follow by the end of this month.
Chembulk had 16 owned and chartered-in chemical carriers in its fleet as of end-March, excluding the three held for sale, with capacities ranging from 8,521-dwt to 32,363-dwt.
