Due to a challenging product tanker market witnessed so far this year, Italy-based shipping firm d’Amico International ended the first nine months of 2017 in loss.
The company reported a net loss of USD 13.6 million for the period, against a net profit of USD 6 million seen in the first nine months of 2016.
Time charter equivalent (TCE) earnings decreased to USD 194.1 million from USD 202.9 million reported in the nine-month period in 2016. The year-to-date variance is due to the weaker spot market experienced in the first half of 2017 relative, partially mitigated by a better result achieved in third quarter of 2017 compared to the third quarter of 2016.
The company delivered a net loss of USD 7.4 million in the third quarter of 2017, against a net loss of USD 7.5 million seen in the same quarter of the previous year.
d’Amico said that its TCE earnings for the third quarter stood at USD 65.5 million, compared to USD 58.5 million reported a year earlier.
“The product tanker market rebound that most of the industry analysts have been predicting, has not yet materialized as at the end of the third quarter of 2017,” Marco Fiori, Chief Executive Officer of d’Amico International Shipping, said.
The company witnessed some initial signs of improvement during the quarter as DIS achieved a daily spot average TCE of almost USD 12,000, which is more than 18% above the level achieved in the same quarter of 2016.
“We believe we will see a much healthier spot market in the following months and this is the reason why we are not taking additional time charter coverage at the moment, as we want to maximise our returns in a growing product tanker market,” Fiori said, adding that there are clear signs of market improvement driven by both supply and demand.
Product tanker earnings remained generally subdued throughout July and most of August. The disruption to US Gulf refining capacity caused by Hurricane Harvey led to a spike in earnings for vessels fixed from Europe to the US or Latin America and also from the Far East on Transpacific voyages.
The spike in earnings in the Atlantic proved to be short-lived. However, earnings in Far Eastern product tanker markets continued to increase throughout September with a number of vessels fixed away from the region on long-haul voyages as a result of the hurricane disruption.
d’Amico said that the full impact of the recent hurricanes on products tanker markets remains to be seen, as US Gulf refinery throughputs continued to be impacted throughout September.
Apart from that, the fleet overcapacity, combined with high inventory levels and only modest growth in global refinery throughputs, has contributed to a depressed freight market.
As markets failed to show any substantial signs of improvement in the third quarter, this rate remained flat at USD 13,500 per day.