Challenging shipping markets continue to affect earnings of Norway-based shipowner MPC Container Ships which closed the second quarter of this year with a loss.
The company reported a net loss of USD 6.4 million in Q2
2019, compared to a profit of USD 1.8 million seen in Q2 2018.
“The container shipping industry continued to endure
macroeconomic uncertainty in Q2 and H1 2019, one prominent contributor of which
being the unpredictability surrounding the US-China trade tensions,” Constantin
Baack, CEO of MPC Container Ships, explained.
“Adding to this were other geopolitical impact factors such
as the potential risk of a global economic slowdown or the impending IMO 2020
low sulphur regulations,” he continued.
Operating revenues were USD 47.8 million in the quarter
ended June 30, 2019, against USD 46.9 million posted in the corresponding
period a year earlier.
During the second quarter, average time charter equivalent
(TCE) rate was USD 9,071 per day, a drop from USD 9,240 per day recorded in Q1
As of March 2019, rates for the larger vessels have
increased due to liner companies needing to cover trade routes while vessels
are taken out of service for scrubber installations. Since scrubber systems are
less frequently installed on smaller vessels, the dynamic has excluded feeder
vessels from rate increases for most of Q2 2019, MPC Container Ships said.
In June, the company has commenced the installation of
scrubbers on one of ten selected vessels and will continue with the installation
on the remaining nine vessels during the second half of the year.
On August 15, MPC Container Ships exercised the option
amounting up to USD 13 million under the loan agreement with Beal Bank. The
funds will be used partly for the refinancing of AS Palina and AS Petra and
partly for investments in scrubber installation of the two ships.
In the first half of 2019, the company declared a
constructive total loss for vessel AS Fortuna after its grounding in September
2018. The vessel was sold and delivered to its new owner in June 2019.
Following the sale, MPC Container Ships owns a fleet of 68
container vessels of which 60 are fully owned and eight operated in a joint
With regard to prospects on an overall macroeconomic level,
MPC Containerships said the outlook for the remainder of the year and the first
months of 2020 will remain influenced by issues relating to IMO, a complex
economic situation as well as trade war risks.
However, the company said that demand-supply rebalancing
might be realistic in the coming period.