Exmar in the Red

(Mar 27 2009)

Gas carrier exponent Exmar recorded a consolidated loss after taxation of $62.6 mill for 2008, compared with $500,000 profit the previous year.
Exmar blamed the loss on the change in fair value of interest rate derivatives entered to hedge the interest rate exposure on long term financing of the fleet. This resulted in an unrealised loss of $88.6 mill and by a Eur/US dollar exchange loss of $5.5 mill.

The company’s operating result (EBIT) was $79.4 mill as against $60.7 mill in 2007. The EBIT was affected by disappointing freight rates for the VLGC sector, but supported by a gain of $19.9 mill on the sale of a mid-size LPG carrier.
Similar to 2007, the mid-size range benefited from good market exposure, but the VLG sector remained disappointing, Exmar said.

The drop in the larger sector was blamed on OPEC’s production cuts, combined with reduced LPG demand for petrochemical outlets and new deliveries, all of which caused substantial offhire periods.

The general downturn and newbuildings being delivered will render the mid-size sector prospects challenging. However, Exmar said it was 80% covered for 2009 and 75% for 2010.
For the VLG market, anticipated lack of Middle East cargoes, weak industrial market outlook and upcoming newbuilding deliveries will continue to have a negative bearing on earnings, the company said.

In the pressurised sector, the first three vessels out of a series of 10 will each be supported by one year timecharters.

LNGC contribution will be boosted by the full operation of the ‘Explorer’ and the delivery of the ‘Express’ in April of this year. Three additional newbuildings are still planned for 2009-2010, all of which will go on long term charter to Excelerate Energy.
‘Excel’ will be returned to her current timecharterer at the beginning of April. However, although the vessel’s earnings are supported by a subordinated revolving facility, the absence of employment will influence the cash flow of the LNGC operations in due course, Exmar warned.

Source: Tanker Operator