VLCC owner ADS Crude Carriers, backed by John Fredriksen and Bjorn Tore Larsen, has paid its first dividend after reporting a profitable first quarter.
ADS went public in Oslo last year after using funds from a private placement to buy three veteran VLCCs from Fredriksen’s Ship Finance International.
Unlike peers who have focused on fitting scrubbers to modern big tankers, ADS is putting the equipment on a trio of 2002-built vessels.
Much expectation has surrounded the company’s dividend and today the first $0.004 per share payment was confirmed.
The debut figure is a modest $1m but much of the cash and profit generated by the company in future is set to be paid out during the anticipated upturn around IMO 2020.
“The VLCC market is expected to be stronger in the second half of 2019 than the first half, with market commentators generally forecasting improving rates in 2020 through 2022,” ADS Crude said.
ADS Crude has one ship on time charter and two trading spot during the first quarter, for which it reported a profit of $1.8m.
Its three tankers will have scrubbers fitted in the third quarter of this year.
“The Company is well prepared to take advantage from the relative savings in fuel cost it expects to benefit from once it installs scrubbers and following the IMO 2020 implementation commencing 1 January 2020 and the initial years following,” ABS Crude said.
“Based on a price differential between low and high sulphur fuel of $175 per MT, the payback time of the estimated scrubber investment is expected to be less than one year.”
