Greek shipowner Okeanis Eco Tankers is training its sights on West African VLCC business to battle the headwinds facing the sector.
The Oslo-listed company said it had concluded "multiple" longer West Africa to China voyages late in the third quarter to lock in prevailing strong rates.
For the fourth quarter, Okeanis has 100% of the available VLCC spot days booked at an average rate of $24,000 per day.
This compares to current spot rates of $4,800 per day from the Middle East to Asia and more than $12,000 from West Africa.
Spot days equate to 21% of total vessel days, with time charters making up the rest at $41,400 per day.
There will be a continuing focus on West Africa to China voyages to capture the premium over the Middle East Gulf market, Okeanis said.
Lone bright spot
The company describes China as a "lone bright spot" in tough tanker markets.
Okeanis said the sector will face headwinds through the first half of 2021 as oil demand remains subdued until the Covid-19 vaccine begins to have an effect on world markets.
In September, Okeanis fixed a VLCC to a leading national energy company at $34,000 per day.
The shipowner is allocating either the 319,000-dwt Nissos Donoussa or Nissos Kythnos (both built 2019) from this month.
The company's suezmaxes have 70% of spot days booked at $17,000 per day, and 39% of the available aframax and LR2 spot days have been fixed at $11,000.
Net profit in the third quarter was $15.6m, which marks an improvement on a $3.2m loss a year ago.
Ebitda of $35m was ahead of consensus of $33m.
The 17 ships brought in revenue of $47.5m, up from $29.3m in 2019.
In September, Okeanis fixed a VLCC to a leading national energy company at $34,000 per day.
The shipowner is allocating either the 319,000-dwt Nissos Donoussa or Nissos Kythnos (both built 2019) from this month.
The company's suezmaxes have 70% of spot days booked at $17,000 per day, and 39% of the available aframax and LR2 spot days have been fixed at $11,000.
Net profit in the third quarter was $15.6m, which marks an improvement on a $3.2m loss a year ago.
The 17 ships brought in revenue of $47.5m, up from $29.3m in 2019.
Daily time-charter equivalent (TCE) earnings were $35,600 per operating day, from $23,200 a year ago.
VLCC rates still higher than 2019
Okeanis said its VLCCs earned $44,000 per day during the quarter, compared to $29,700 per day in the same quarter of last year.
Suezmaxes made $31,800 per day, up from $21,100 earned in the third quarter of 2019.
Aframaxes and LR2s earned $15,200 per day respectively in the latest quarter, up from $16,300 a year earlier.
Fearnley Securities said: "The achieved TCEs and bookings are nothing short of impressive."
Spot VLCC rates were $8,000 higher than peers and suezmaxes $10,000 better than most rivals, the investment bank added.
The company's daily vessel operating expense figure was $8,115 in the third quarter.
Voyage costs for the third quarter hit $9.9m, up from $7.5m the year before.
The increase was due to an enlarged fleet and an 18% decrease in time charter coverage to 44%, offset by a 44% reduction in the price of bunkers.
The Okeanis board has declared a cash dividend of $0.10 per share, amounting to $3.2m.
"With continued lockdowns in Europe and prevailing uncertainty we consider a more conservative dividend approach the right way to go," Fearnley said.
