Okeanis Eco Tankers (OET) reported its smallest profit in nine quarters, hurt by weaker revenues from its eight VLCCs and costs for special surveys it chose to carry out during the seasonally slow third quarter.
The New York-listed owner of 14 large modern tankers posted net income of $14.6m in the three months to September, down 25% from the same period of 2023.
“Q3 experienced a weakening in rates, largely driven by lower demand on the back of heightened refinery maintenance and consistent with normal seasonality,” the company said in a presentation accompanying its financial results on Friday.
OET’s entire fleet was employed in the spot market, which deteriorated between July and September.
Its eight VLCCs saw average time-charter equivalent revenue drop to $43,100 per day from $57,900 per day in the same period of 2023.
The company guided that it has already fixed nearly two-thirds of its VLCC charter days in the ongoing fourth quarter at a slightly higher rate of $46,900 per day, which is also above the $45,200 per day it earned in the fourth quarter of 2023.
As for its six suezmaxes, OET guided that 70% of available fourth-quarter spot days have been fixed at $40,200 per day, which is down both on a year-on-year and a quarter-on-quarter comparison.
Clean conversion continues
OET said in August that it had converted half its VLCC fleet into clean product tankers it describes as “LR4” ships, to capture higher earnings in one-off spot employment opportunities.
It said that in the third quarter it transitioned one more VLCC from carrying crude oil to “higher-earning clean product trades on a spot basis”.
The company also used the opportunity to conduct special surveys on three VLCCs during the “seasonally weaker third quarter” — the 319,000-dwt Nissos Kythnos and 318,700-dwt Nissos Rhenia (both built 2019), as well as the 319,000-dwt Nissos Anafi (built 2020).
TradeWinds reported earlier this week that the Nissos Rhenia suffered a breakdown off Portugal. However, vessel trackers show the ship was underway again on Friday.
As all of OET’s eight VLCCs were constructed after 2019, six of them were due to pass their first special survey within 2024. The company said on Friday it has already completed five of them, at the cost of about $2m per vessel.
Only the special survey of the 319,000-dwt Nissos Donoussa (built 2019) remains outstanding, which is scheduled to take place during November.
On account of the lower profit, OET cut its dividend payment to $0.45 per share from the $1.10 per share it paid out in the previous two quarters.
Shares and dividend drop
As part of a general market malaise for tanker stocks lately, Okeanis shares have lost about a quarter of their value since early October and closed trading at $25.82 apiece in New York on Thursday.
This gives the company a market capitalisation of $831m, which is below the net $967m value of its fleet as of the end of September
The Alafouzos family, which is led by brothers Ioannis and Themistoklis, owns 58% of Okeanis. No other outside shareholder owns more than 5%.
Its six suezmaxes were built between 2016 and 2020 and all its VLCCs have been constructed after 2019.
