News bulletin – tanker shipping

NEWS BULLETIN

TANKER SHIPPING

BW MAKES EPIC MOVE

BW Group has purchased 54.7 per cent of the shares of Epic Gas and launched an unconditional tender offer to acquire the remaining shares, which is open to 16 April. BW Group intends that Epic Gas will keep its listing on Merkur Market and welcomes shareholders who would like to continue to hold shares in the company.

“BW Group is pleased to acquire this shareholding in Epic Gas with its strong operational platform and quality fleet,” says Andreas Sohmen-Pao, chairman of BW Group. “The transaction represents an opportunity to acquire a well-managed company, led by CEO Charles Maltby, and we look forward to working together to achieve successful growth in the service of our customers.”

Epic Gas reported strong results for the full year 2018, with revenues up 11 per cent year-on-year at $155.5m, adjusted EBITDA up 51 per cent at $44.5m and last year’s net loss of $28.1m easing to a 2018 loss of $2.7m, with the fourth quarter showing a net profit of $0.9m.

“The company is pleased to report a significant year-on-year improvement in business performance with the net profit in the fourth quarter reflecting continued focus on quality, cost control and fleet optimisation as well as the improving underlying market fundamentals,” says Maltby. www.bw-group.com www.epic-gas.com

TEMPERED OPTIMISM FROM BW LPG

BW LPG, meanwhile, has reported net revenues of $301m for the full year 2018, down from $335m in 2017, with EBITDA similarly falling from $126m in 2017 to $104m. Timecharter equivalent earnings were down on the previous year, especially in the large gas carrier sector, although the fourth quarter witnessed a strong recovery in VLGC rates.

“With strengthening fundamentals, we expect the freight market to continue to improve going forward,” the company says. “We remain cautiously optimistic for the full year [2019] due to sustained US LPG production growth and incremental export volumes being added from other key loading areas such as Australia and Canada. However, increased demand for VLGCs from growing US exports will in part be offset by a high level of newbuild deliveries. We maintain our neutral view on Middle Eastern VLGC exports as incremental regional growth is expected to compensate the effects from the re-imposed sanctions on Iran.”

Since the end of 2018, the company has established a Product Services division as part of its aim to provide a low-risk and fully integrated product delivery service to its customers. The division will engage in sourcing LPG and offering it on a cif basis direct to end users.

“The new product services division reflects BW LPG’s ambitions to provide existing and new customers with reliable, integrated LPG delivery services,” says CEO Martin Ackermann. “Whilst LPG shipping remains our core business, we aim to diversify our business offerings, innovate to capture market opportunities, and maximise value for both customers and shareholders”. www.bwlpg.com

TOGETHER IN ETHYLENE

Teekay LNG Partners’ fleet of ethylene-capable LPG tankers have joined the Lauritzen Kosan ethylene pool. Together with Lauritzen Kosan’s 11 ethylene carriers, three ethylene carriers supplied by other owners and Teekay LNG’s seven-strong ethylene fleet, the Lauritzen Kosan pool will become one of the leading suppliers of ethylene carrying capacity in the smaller gas carrier size segment with a total of 21 units.

“We are proud to have Teekay LNG, a world leader in energy transportation, joining us in our strategy to service existing and new customers. This is an indication of our strong market position in the gas carrier industry,” says Thomas Wøidemann, CEO of Lauritzen Kosan.

Teekay LNG’s ethylene carriers range in size from 5,500 m3 to 12,000 m3. The three smaller units are also capable of carrying liquid chemicals, while the two 2011-built 12,000-m3 carriers can also handle LNG.

“With Lauritzen Kosan’s close and long-lasting customer relationships, we are confident that we have found the right commercial and operational platform for our fleet of ethylene gas carriers,” says Mark Kremin, president/CEO of Teekay Gas Group Ltd. Teekay’s ethylene carriers were formerly operated in a joint venture with Exmar.

Lauritzen Kosan’s parent company, J Lauritzen, has reported negative EBITDA of $6.3m for full-year 2018, a $24.7m improvement on the 2017 figure, with its net result moving into the black in the fourth quarter for the first time in several years. The dry bulk and gas tanker markets continued to improve and the result was within expectations.

“2018 was a year with overall good progress where we improved our financial as well as our operational performance and enjoyed overall market improvements,” says CEO Mads P Zacho, although he adds that “despite considerable result improvements there is still some way to go before we are back where we want to be in financial terms”. www.j-l.com www.teekay.com

STEALTHGAS READY FOR UPTURN

StealthGas reported a 6.5 per cent increase in revenues to $164.3m in 2018, although its net loss for the year worsened from $1.2m in 2017 to $12.3m, as a result of higher voyage costs, an $11.4m impairment loss on vessels held for sale, and higher interest charges.

Board chairman Michael Jolliffe says: “Our performance in the fourth quarter of 2018 did not reflect the strength typically associated with the fourth quarter of the year, which usually benefits from the seasonal factor of winter in the Northern Hemisphere. This year, unfortunately, although the European market was strong, the Asian market followed the opposite course with low rates and subdued timecharter activity. These elements impacted our revenues and prevented us from enjoying a profitable quarter.

“We anticipate, however, that the market sentiment in Asia will gradually turn favourably and our company is well positioned to take advantage of this opportunity,” Jolliffe continues. “Demand for LPG is strong, the orderbook is very low and timecharter rates for those contracts being fixed have remained at high levels notwithstanding the Asian market slowdown. This leads us to conclude that the solid market fundamentals will eventually lead to a market correction.” www.stealthgas.com

KIRBY TAKES CENAC

Kirby Corp has acquired Cenac Marine Services’ tank barge fleet, which consists of 63 inland tank barges and 36 tow- and tugboats. Cenac moves petrochemicals, refined products and black oil, including crude oil, residual fuels, feedstocks and lubricants, on the lower Mississippi River, its tributaries, and Gulf Intracoastal Waterway for major oil companies and refineries. The $244m acquisition was financed through additional borrowings.

Following the deal, Kirby Corp now has more than 1,000 inland tank barges in its fleet, along with 321 inland towboats, 53 coastal tank barges and 50 coastal tugboats.

Kirby Corp has also announced net earnings of $78.5m for the full year 2018, down from $313.2m a year earlier. The fall in income was due to financial items, notably higher interest costs following earlier investments and a return to a negative tax position after 2017’s one-off relief. In operational terms, Kirby reports strong demand and high utilisation rates, with rising rates. These favourable market dynamics are expected to continue in 2019, with new petrochemical and pipeline capacity coming onstream. www.kirbycorp.com