Swedish tanker owner Concordia Maritime reported its Q2 2022 results and said it has put its tanker-to-container ship conversion project on hold owing to uncertainty in the market, says an article published in Riviera.
Conversion Plan
Earlier this year, Concordia Maritime launched a technical design study to convert and adapt a P-MAX vessel for container transport.
The study found it was technically feasible to complete the conversion and it would take between three and five months.
But that plan is on hold now because of what Concordia described as the uncertainty in the market.
High Bunker Price
High bunker prices during the quarter highlighted the difference in earning potential between vessels of new and older design. Concordia said the width and intake of its P-MAX ships have higher consumption compared with standard MR vessels.
Charter Contract
The base rate for the P-MAX vessels out on time charters with Stena Bulk during the quarter was US$15,500/day.
Another vessel, Stena Polaris, corresponded to a time charter contract of approximately US$18,000/day.
Profit Sharing
The surplus is shared equally with time charter partner Stena Bulk.
Total profit-sharing amounted to Skr18.1M (US$1.7M).
Including profit-sharing, average earnings for the vessels contracted out to Stena Bulk during the quarter amounted to the equivalent of US$18,500/day. Average earnings for the first half of the year were US$16,900.
Poistive Impact
The Stena-controlled shipowner said the Ukraine war has had a positive impact on the product tanker market, overall.
According to Clarksons Research, average earnings for an MR vessel on the spot market at the beginning of Q2 were around US$19,000/day and rose to US$43,000/day by the end of June.
Charter Market Development
The time charter market also showed positive development during the quarter, with average earnings for a one-year time charter increasing from US$14,250/day to US$20,500/day.
Spot Rate Market
The high spot market is not directly affecting profit-sharing, as Stena Bulk employs the vessels on contracts of varying lengths, some being short market-related contracts and others being medium fixed-rate time charters.
Primary Aim
In the first six months of 2022, Concordia reported total profit-sharing of approximately US$1.9M as a result of the strong market recovery in Q2.
The shipowner sold Stena Paris to a Greece-based buyer for US$5M.
The primary aim of the sale was to take advantage of the increased ship valuations and reduce the company’s fleet.
Concordia Fleet
Concordia Maritime’s product tanker fleet consists of seven 65,200-dwt P-MAX vessels. Six of those are under a time charter contract with Stena Bulk running until 2026.
Suezmax Stena
Concordia’s 158,000-dwt Suezmax Stena Supreme was employed on the spot market via the Stena Sonangol Suezmax Pool and brought in an average of US$24,600/day in Q2 2022.
Poistive Liquidity
The vessel was sold in May 2022 and generated a positive liquidity effect of approximately US$4M.
Concordia said unlike the P-MAX vessels, the transaction and proceeds from the sale of Stena Supreme are not subject to any special conditions from lenders and the surplus will strengthen the company’s cash position.
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Source: Riviera
