Singapore product tanker giant Hafnia remains a firm believer in consolidation to unlock value, after squeaking into profit in the third quarter.
The BW Group-owned company announced its best net result for the third three-month period since 2016 at at just $373,000, against a loss of $10.56m in 2019.
Year-to-date earnings stand at $175.2m, however.
Hafnia said the quarter's results provided a "glimmer of hope for a smooth rebalancing" of the clean market.
"However, at the start of the fourth quarter, we have seen a significant increase in Covid-19 infections in the northern hemisphere followed by lockdowns in many countries, making it difficult to assess the current state of the global economy and resulting oil demand," chief executive Mikael Skov said.
"Hafnia still believes that further consolidation is needed within the product tanker sector to fully unleash value and synergies from additional operational scale."
Ardmore Shipping rejected a $270m takeover offer from Hafnia in the summer, believing it undervalued the company.
Rates drop
Skov said the third quarter result was achieved despite global Covid-19 restrictions and demand disruptions which led to a significant quarter-on-quarter drop in rates.
With a flattening contango oil price curve towards the end of the second quarter, the market also saw vessels coming out of floating storage and returning to the active fleet, the CEO added.
"This increased available tonnage steadily throughout the third quarter, decreasing rates in line with our expectation that part of the global fleet would be less busy as oil inventories and demand recalibrated," Skov said.
LR2 order confirmed
Ebitda was up at $51.7m from $50m. Revenue dropped to $165.5m, versus $188.5m the year before.
Hafnia owns 87 ships and charters in another 15.
The company also confirmed an order for two LNG-fuelled LR2 tankers through its Vista joint venture with CSSC Shipping.
The vessels will be built at Guangzhou Shipyard International in China for long-term charter to Total on delivery in 2023.
Norwegian investment bank Fearnley Securities said Hafnia's Ebitda was ahead of its forecast.
Bookings for the fourth stand at $13,400 per day for 50% of fleet days, in line with expectations, Fearnley added.
