Long term charters buoy Concordia

Swedish tanker giant Concordia Maritime has reported what it called 'good earnings in a weak market'. In the second quarter of this year, the Gothenburg-based company said that total turnover amounted to SEK162.5 mill with an EBITDA of SEK44 mill.
President Hans Noren said that despite the weak tanker markets, all of the vessels were on timecharter contracts, resulting in higher revenues that if the vessels had been trading on the spot market.

First half EBITDA was reported as $11.4 mill and Concordia posted an operating profit of SEK46.5 mill. The 2Q09 financial net was SEK6.2 mill, which reflected the lower loan costs due to lower interest rates. Investments generated income according to plan and the company reported a positive effect of the US dollar/SEK currency exchange of SEK8.2 mill.
Total financial net for 1H09 was minus SEK21.1 mill. However, this figure included the complete write down of the value of the comlany's fund share in the UK hedge fund Weavering Capital, which amounted to $3.6 mill.

Last Month, Concordia decided not to exercise charter options on the VLCCs 'Stena Victory' and 'Stena Vision'. They will therefore handed back to owner General Maritime at the end of this year. Noren said that following many years of record high tanker rates, his assessment was that for the next few years, the market would remain weak.

"The trend of the market is a reminder of the importance of a long term approach and of having a stable economy and a strong financial position," he said.
"At Concordia Maritime, we have been planning for the current market situation for several years. The whole fleet is signed to long term charters, which means that we have secured our cash flow for some years. This will enable us to act swiftly when opportunities for new business deals arise in a weak market," Noren explained in the first half review.
The company also forecast that for this financial year, the result before tax was expected to reach SEK45 mill, wich would be the equivalent of SEK0.94 per share.