Economy Maritime

Scorpio Bulkers Shrinks Quarterly Loss

Written by Maritime First

…As Oil steady after U.S. drilling tempers bullish sentiment***

Monaco-based bulker owner Scorpio Bulkers managed to cut its net loss, shrinking it to USD 5.8 million in the first quarter of 2018 from USD 34.6 million reported in the same period a year earlier.

For the three months ended March 31, 2018, the company’s total vessel revenues reached USD 54.3 million, compared to USD 34.7 million seen in the first quarter of 2017.

First quarter 2018 revenues were driven by high levels of demand for coal and grains for the better part of the quarter. Scorpio Bulkers’ Kamsarmax fleet earned USD 12,881 per day during the period, while its Ultramax fleet earned USD 9,757 per day.

Voyages fixed so far for the second quarter of 2018 for the Kamsarmax fleet were at around USD 13,250 per day for 56% of the days, and for the Ultramax fleet they were at USD 11,925 per day for 48% of the days.

Furthermore, the company’s Board of Directors declared a quarterly cash dividend of USD 0.02 per share on April 20, payable on or about May 31, 2018, to all shareholders of record.

Following the end of the first quarter of the year, Scorpio Bulkers entered into two financing agreements related to one Kamsarmax and one Ultramax vessel.

On April 3, 2018, the company received a commitment for a loan facility of up to USD 12.75 million to finance the company’s Kamsarmax bulk carrier to be delivered from Jiangsu New Yangzijiang Shipbuilding Co Ltd in China in the third quarter of 2018.

Later in April, Scorpio Bulkers entered into a financing transaction in respect of one of its Ultramax vessels involving the sale and leaseback of the SBI Tango, a 2015-built vessel, for consideration of USD 19 million. The transaction provides options to repurchase the vessel beginning on the third anniversary of the sale until the end of the bareboat charter agreement.

Meanwhile, oil prices were steady on Monday as a rising U.S. rig count pointed to further increases in American output.

Brent crude oil futures were at 74.07 dollars per barrel at 0354 GMT, virtually unchanged from their last close.

U.S. West Texas Intermediate (WTI) crude futures were  at 68.37 dollars a barrel.

U.S. drillers added five oil rigs, drilling for new production in the week-ended April 20, bringing the total-count to 820, highest since March 2015, according to General Electric’s Baker Hughes energy services firm.

Only Russia produces more at almost 11 million bpd.

Prices are being supported by the supply cuts led by the Organisation of the Petroleum Exporting Countries (OPEC) that were introduced in 2017 to prop up the market.

“Added price pressure comes from U.S. sanctions against the key oil-exporting nations of Venezuela, Russia and Iran,” said J.P. Morgan Asset Management Global Market Strategist, Kerry Craig.

He was referring to action the U.S. government had taken on Russian companies and individuals, as well as on potential new measures against struggling-Venezuela and OPEC-member Iran.

“Stay long, oil,” U.S. bank J.P. Morgan said in a separate note to clients.

The United States has until May 12, to decide whether it will leave the Iran nuclear deal.

The U.S. trade action against Russia, and potentially, against Iran, has resulted in a slump in Russia’s ruble and Iran’s rial.

This means costs for any imported goods become more expensive for its citizens or companies, but it has also pushed up the value of Russia’s and Iran’s oil sales as all of their productioncosts are in the local currencies.

Meanwhile, foreign sales are virtually all made in the U.S. dollar.

Trump on Friday accused OPEC of “artificially” boosting oil prices, threatening on Twitter that this “will not be accepted”, drawing rebukes from several of the world’s top oil exporters within OPEC.

Additional report from World Maritime News

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Maritime First