Klaveness Combination Carriers (KCC) is optimistic of good times ahead after posting its best ever result.
The Oslo-listed company's ships can operate in both tanker and bulker markets and it sees "considerable upside potential" for both once oil markets rebalance and the global economy restarts after coronavirus lockdowns.
KCC's earnings outlook is positive based on forward contracts secured for the fleet, the outfit said.
So far in 2020, the shipowner's three Cleanbu newbuildings, which carry bulk cargo and oil products, have called at a number of new terminals and transported new types of cargo, including jet fuel.
The pandemic has had "limited" financial and operational impact to date, KCC added.
Net profit in the first quarter was $4.31, up from a loss of $0.8m in the same period of 2019. Revenue grew to $22.4m from $13.3m as rates rose and it added two more ships.
KCC's adjusted Ebitda was $12.9m, 40% higher than in the fourth quarter. Its dividend was trebled to $0.03 per share or $1.44m as a result.
Tanker boom helps KCC
Chief executive Engebret Dahm said the results were its best yet and came on the back of increased combination trading and a strong tanker market.
KCC has been fixing ships on term deals for tanker trades, to take advantage of high rates.
"We are also pleased to have concluded a higher tanker market coverage at attractive levels for the balance of 2020," Dahm added.
"This supports a strong outlook for KCC’s earnings for the 2020 and an increased financial robustness in the current uncertain Covid-19 situation."
The nine Cabu ships, which can carryd ry bulk and caustic soda cargoes, produced time charter equivalent (TCE) earnings of $20,283 per day.
This is the best figure since 2015, with 92% of the fleet capacity employed in combination trades.
Caustic soda shipment volume was strong in the quarter and earnings from this strengthened during the quarter following a stronger MR tanker spot market in the second half of the period.
The impact of the weak physical dry bulk market was partly offset by a gain from forward freight agreements.
The Cleanbu fleet produced TCE of $20,932 per day overall, and $24,000 per day in combination trades.
One of the three ships traded as a pure tanker vessel, while the two others worked in combination patterns.
Fleet fully financed
KCC said it is in a strong cash position, with a fully financed fleet.
Bank cash has been secured for all three Cleanbu newbuildings with delivery in 2020, and credit approval has been obtained for the financing of two more due in 2021.
Deliveries from China will be delayed due to Covid-19 however.
The next vessel is now expected in July, with the four subsequent newbuildings coming between October 2020 and March 2021.
But the company warned these dates are still uncertain and additional delays might occur.
