- As HSH Nordbank’s Shipping Loan Losses Reach USD 221 Mn
Singapore-based Petredec Holdings (Eastern) has decided to further expand its fleet with up to four very large gas carriers (VLGCs) to be constructed by China’s Jiangnan Shipyard.
Under the contract signed between the parties, Petredec has placed orders for two 84,000 cbm LPG carriers with the option to build further two units.
Petredec said that the would be built according to the company’s “usual high specification, once again improving speed and consumption, making these vessels some of the most economical VLGCs in the global fleet whilst also complying with all the latest environmental legislation including NOx Tier III, new IGC code and with USCG approved Ballast Water Treatment System.”
The first two LPG carriers are scheduled to be delivered in the second and third quarters of 2019, respectively. The optional vessels, if exercised, would join their owner later in 2019, increasing Petredec’s owned fleet of VLGCs to 21.
“We are starting to see some consolidation within the VLGC sector, steadying owners returns and the market expects to see accelerated scrapping of older vessels which are less efficient, don’t comply with latest environmental legislation and are facing expensive dry docks,” Giles Fearn, Petredec Chief Executive, said.
“Despite already being a substantial ship owner, Petredec must continue to provide the best service to our customers and therefore cannot be too dependent on third party tonnage providers,” Fearn added.
The company, which delivers over 12 million tonnes of liquefied propane and butane (LPG) annually, controls a fleet of over 70 gas carriers.
In the meantime, with persistent shipping woes, the German-based provider of shipping finance HSH Nordbank has seen its loan loss provisions increase in the first quarter of 2017.
Namely, the bank’s loan losses amounted to EUR 198 million (USD 221.3 million) during the three-month period, significantly larger than EUR 62 million reported a year earlier, primarily related to the difficult market situation in shipping.
The Non-Core Bank accounted for EUR 187 million of these provisions, while the Core Bank accounted for only EUR 11 million, “owing to its good portfolio quality,” HSH Nordbank said.
Due to the full utilisation of the second loss guarantee on the balance sheet as at March 31, 2017, loan loss provisions were, for the first time, offset only in part by EUR 142 million. After the guarantee, loan loss provisions in the lending business of the group thus came to EUR 56 million.
Total income of EUR 20 million in the shipping segment reflected a decline in net interest income as a result of a managed reduction in the loan portfolio of EUR 6.7 billion.
“In a market that remains challenging, new business in shipping was selective and flat year-on-year at EUR 0.2 billion as the bank is focusing on names that maintain a good credit rating,” HSH Nordbank said.
For the 2017 business year the bank is still expecting a positive group pre-tax result in the region of EUR 100 million, which would be comparable to the previous year when it reached EUR 121 million.
The bank said that it “has had a successful start to the current financial year in operating terms,” as it generated a pre-tax profit of EUR 128 million in the first quarter of 2017.
World Maritime News