Monaco-based LNG shipper GasLog reported record annual profit with spot earnings in a tight LNG shipping market boosting the figures.
The company reported a profit for the year 2018 of $47.7 million, which compares to $15.5 million recorded in 2017.
Speaking of the results, GasLog’s CEO Paul Wogan said that the earnings were driven in large part by “very strong earnings from our spot vessels against a backdrop of extreme tightness in the LNG shipping market.”
These spot earnings, combined with GasLog’s fleet growth during the year, and the company’s strong operational performance and strict cost control, delivered record annual result, Wogan said.
“While spot rates have recently moderated from fourth quarter peaks, in line with historical seasonal trends, we expect tightness in LNG shipping markets to return given forecast LNG supply growth through 2020 and relatively few uncommitted newbuild vessels delivering in that period,” he said.
Looking beyond 2020, GasLog expects additional shipping capacity will be required if consensus LNG demand and supply forecasts are realized.
However, whilst the company does now believe that the LNG shipping market is heading towards a balanced state early next decade, the long-term secular growth of LNG supply and demand mean that, over the medium and long-term it will be a dynamic and growing industry.
The shipper did note that newbuilding order activity in 2019 needs to slow relative to 2018 levels in order to reduce the risk of vessel oversupply.