A surprisingly high price for the sale of two older vessels helped Norway's Knutsen NYK Offshore Tankers (KNOT) improve its results last year.
The Haugesund-based company, a joint venture between Knutsen OAS Shipping of Norway and NYK Line of Japan, reported a pre-tax profit of $16.4m for 2020. That reverses a loss of $5.2m in 2019.
KNOT is a leading player in the shuttle tanker business, expanding its business with newbuildings with long-term charters to oil companies.
So it may be puzzling that two tankers that are a quarter century old would contribute to a stronger result for a company that is otherwise concentrated on modern tonnage.
But the sale of the 124,000-dwt Elisabeth Knutsen (built 1977) and the 146,000-dwt Gerd Knutsen (built 1996) last year commanded a premium in the sale-and-purchase market. Though the exact price has not been revealed, the company said they contributed to its profit.
KNOT sold the Gerd Knutsen after the ship was redelivered from a long-term charter to Citco Petroleum, according to KNOT’s annual report.
In 2020, the Elisabeth Knutsen ended a long term charter to Tullow Ghana Ltd and was sold on. Both ships were sold for further trading, rather than recycling.
Broker reports said that the Elisabeth Knutsen was sold to a little-known company called Tymphy Enterprises and that the Gerd Knutsen went to Fides Ship Management of Ukraine.
But KNOT company chief financial officer Oystein Emberland said he cannot comment specifically on what elderly shuttle tankers are fetching in the market.
“It is not an easy answer here. ... Tankers get well over market price if a buyer needs a DP [dynamic positioning] tanker. If not, the price is a little over scrap price,” he said.
Last year, KNOT took delivery of new shuttle tankers and won four long-term contracts with ENI to provide LNG-fuelled vessels on Norwegian oilfields.
At the end of 2020, KNOT's book equity stood at $517m.
Spin-off Knutsen NYK Offshore Partners is listed on the New York Stock Exchange.
