Tanker owner and operator ADS Crude Carriers has seen an increase in the cost of its scrubber installation project in China.
The VLCC owner said that the total expected investment in scrubber systems and taking the vessels through intermediate surveys is around USD 6.5 million per vessel, up from the previously guided USD 5.5 million per vessel.
The company, set up in April 2018, explained that the change was mainly due to “increased estimated costs necessary to maintain the highest level vessel rating.”
Subsequent to quarter end, two of the company’s vessels went into yard to perform mandatory intermediate surveys and retrofitting of scrubbers, with the third vessel expected to enter yard around the end of September. ADS Crude Carriers said that the yard stays remain on schedule with two expected to finish before end of the third quarter of 2019 and one during the fourth quarter of the year.
The rise in costs was revealed as part of the company’s second quarter of 2019 financial report.
ADS Crude Carriers reported a net profit of USD 0.6 million for the second quarter of 2019, down from a profit of USD 1.2 million seen in the first quarter of the year. Net revenue decreased 27% to USD 4.8 million from USD 6.5 million in the previous quarter, mainly due to increased voyage expenses.
“The seasonally weak tanker market impacted our second quarter earnings, resulting in a 27% lower average Time Charter Equivalent quarter-on-quarter of USD 17,463 per day and providing a net profit of USD 0.6 million, of which we will immediately return USD 0.5 million back to shareholders by way of a dividend,” Bjørn Tore Larsen, Chairman of the Board of Directors, said.