Tanker owner First Ship Lease Trust (FSL Trust) managed to stay in the black so far this year, as fixed-rate period charters helped it overcome a lacklustre spot market.
The Singapore-based company announced on Tuesday a thin profit of $543,000 for the second quarter, down from $1.33m in the same period last year.
Net income for the entire first half of 2021 dropped to $879,000 from the $8m profit the company had posted between January and June 2020.
“With ... limited market exposure, we ended the second quarter 2021 with a positive result despite the continuously weak tanker market environment,” chief executive Roger Woods said in an earnings release.
FSL Trust owns eight product tankers, two chemical tankers and an aframax. Seven of its product tankers operate on firm, fixed-rate bareboat charters to James Fisher Everard and generated an adjusted Ebitda of $1.6m in the second quarter.
However, the 20,000-dwt chemical tankers FSL London and FSL New York (both built 2006), which were previously on multi-year time charters, entered spot trading over the summer.
Woods said spot markets may pick up soon.
“There have ... been some positive signals as OPEC+ recently announced to increase oil production, whilst air traffic is slowly picking up, which is expected to support demand for product tankers,” he said in the statement.
Board chairman Stathis Topouzoglou said FSL Trust will concentrate on its cash flows.
“The investment environment in shipping remains challenging and we will continue to prioritise projects that can deliver long-term stable cash flows for the trust and address the changing environmental regulation the shipping industry is confronted with,” he said.
