Oslo-listed Hunter Group is hopeful of increasingly profitable VLCC spot markets into 2022 as fundamentals shift in favour of modern vessels.
The Arne Fredly-backed owner of four big tankers admits a recovery in the sector has taken longer than it expected.
But the company said it has managed to fix three vessels on shorter time charters at premium rates with attractive redelivery locations.
And positive rate developments were seen towards the end of the third quarter. These have continued into the final three months.
"We see numerous positive drivers for the tanker market going forward. We believe that the market trough is behind us, and that we are at the beginning of what may be a very interesting and lucrative period for owners of large, modern eco-design tankers," Hunter said.
Global oil inventories are now at critically low levels, the owner believes, with demand remaining strong and oil prices moving higher.
Modern vessels profiting
Rates have increased from low levels seen in the summer and recent spot fixtures for scrubber-fitted vessels are now at about $22,000 per day, the owner added.
This is enough to put Hunter back in the black, based on its breakeven of $21,500 per day.
"If these trends continue it should be only a matter of time before oil production, seaborne exports and consequently tanker rates and asset values materially pick up from current levels," Hunter said.
The owner's average earnings were $21,000 per day in the third quarter, but the figure for spot days was $12,100 per day.
Forward bookings show rates rising
However, Hunter has now booked 94% of days in the fourth quarter at an average of $26,600 per day.
About 77% of spot days are fixed at $18,500 per day.
The net loss in the third quarter was $1.7m, against a profit of $21.7m in booming markets in the same three months last year.
Revenue plunged to $7.3m from $35.8m.
Fearnley Securities said the result was in line with expectations.
"More importantly, Hunter has proactively taken coverage with the prospects [for] the winter market becoming slimmer by the day, particularly with the recent strategic petroleum reserve release and potential for Opec+ potentially holding back volume hikes," the investment bank added.
Vessel sales have meant Hunter has paid dividends of close to $100m since August 2020.
The company said four VLCCs were scrapped in September alone, against six ships in the first six months.
"This represents a significant uptick and bodes well going forward," the group added.
With few new tanker orders, fleet growth should be limited for several years, the shipowner said.
"We cannot direct the wind, but we can adjust the sails," the company added.
