Best year since 2001
The combination of a strong market, increased earning capacity and a successful chartering strategy contributed to making 2015 the best year for Concordia Maritime since 2001, if we exclude years with ship sales.
Overall, we are able to report a profit before tax of SEK 174.3 (16.5) million for the year. EBITDA was SEK 423.8 (214.7) million, corresponding to USD 50.3 (31.3) million. Result after tax for the fourth quarter amounted to SEK 49.8 (–12.7) million. EBITDA was SEK 117.3 (42.9) million, corresponding to USD 13.9 (5.6) million.
With hindsight, we can say that the year turned out as we expected – even rather better. Looking at the year as a whole, income in the MR and Suezmax segments was about 50 percent higher than in the previous year. The main driving forces included strong underlying demand for oil and petroleum products, driven in turn by low oil prices, and changes in the global refinery infrastructure. A contributing factor to the strong market for crude oil transportation is the overproduction of crude oil of 1.5–2.0 million barrels per day. In the crude oil segment, modest growth in the fleet also contributed to a good balance between supply and demand. Total seaborne transportation of oil products increased by just over 6 percent during the year, the strongest increase since 2006.
The fact that, for our part, we increased both EBITDA and result before tax is a direct consequence of both the strong market and pro-active work on our fleet deployment. The strategy of employing the vessels on the open market proved absolutely right and this – together with an increased focus on niche trades – has contributed significantly to the positive trend.
The strong spot market in the latter part of 2014 and virtually the whole of 2015 has resulted in the time charter market also now strengthening. We chartered out a P-MAX tanker for two years at the end of the year and at the beginning of 2016, we chartered out another vessel for a year. Both contracts are fully in line with our chartering strategy. We ensure a good level of income for the vessels, while balancing the exposure to the spot market in a well-judged way.
Another factor behind these developments is an increased earning capacity – as a result of more vessels in the fleet. Overall growth in the fleet during the year, including vessels chartered in, was about 20 percent. The two new IMOIIMAX tankers, Stena Image and Stena Important, have been very well received by the market and have performed above expectations. The transaction is a good example of ordering the right type of vessel at the right time and the right price. Trade in vessels, both purchases and sales, is an essential part of every shipping company’s business model – and the ability to use the right timing cannot be emphasised enough.
During the fourth quarter discussions were initiated in order to start a settlement process regarding the dispute that arose from the grounding of Stena Primorsk in the Hudson River in December 2012. This will continue in the first quarter in 2016. More information can be found on page 6 of this interim report.
As we look back on the year, it should also be said that 2015 was another year in which we were spared from any serious incidents and accidents. Shipping is associated with risks for both people and the environment, but we do our utmost to minimise or eliminate them. Safe vessels, competent crews and well-developed procedures are the backbone of these efforts.
Market outlook 2016
The market has continued to be strong in the early part of 2016 and our basic view of the year is positive. We expect the price of oil to remain low and continuing changes in the global refinery infrastructure to result in stable demand for transportation of oil and refined petroleum products. Relatively large numbers of new ships are expected to be delivered during the year, particularly crude oil tankers at the end of the year, but it is too early to speculate the extent to which these will affect the market.