Ocean Yield nearly doubled its profit in the first quarter as higher revenue in boxship and tanker leasing offset a slump in its offshore segment.
The Oslo-listed ship lessor reported net income of $36.8m in the first quarter, up from $18.6m in the same period of 2016.
The results include various one-time items such as the gain on the sale of bonds in American Shipping and foreign exchange losses from a year earlier. On an adjusted basis, net income grew 15% to $33.4m for the first quarter.
Overall revenue was $78.6m, up from $66.1m a year earlier. Tanker revenue was up to $9m from $2.7m in the same period of last year while container vessel revenue was $5.3m, up from nil.
In the first quarter, Ocean Yield took delivery of the 19,154-teu MSC Rifaya and MSC Leanne (both built 2017) with 15-year charters to a major European container line.
In the offshore segment, which saw revenue drop 22% to $17.1m, Ocean Yield converted $18.6m in future lease payments from Farstad Shipping into equity in the three way tie-up of Farstad, Solstad Offshore, and Deep Sea Supply.
The company is also remarketing the 156-metre Lewek Connector (built 2011) after it was redelivered from bankrupt Emas Chiyoda Subsea
Chief executive Lar Solbakken was positive on the result, "despite lower earnings from the Lewek Connector."
"After a period with soft market conditions in both shipping and offshore, we are of the opinion that we have passed the bottom of this cycle in several shipping and offshore segments," Solbakken said. "We are therefore actively pursuing new investment opportunities in order to further expand our portfolio of vessels on long-term charter."
Ocean Yield said $200.6m in unsecured bonds in American Shipping were refinanced during the quarter. Ocean Yield bought $50m of the new, five-year unsecured bonds and received net cash proceeds of $156m on the old bonds.
The company said its charter backlog was $2.8bn with a remaining average duration of 11.4 years. It also declared a dividend of $0.185 per share.
