The quarter's result is a steep drop on the $25.1m profit turned in the first quarter last year, where IMSK benefited from a $28.2m gain from restructuring.
The company made a profit on the sale of Norgas Patricia during the quarter and as a further step in its cost efficiency programme will continue to transfer responsibilities to its hub in Singapore.
Revenues from the company's fleet edged up to $17.9m, although IMSK has suffered as petrochemical output from the Middle East has dropped, due to factors including shutdowns and plant optimisation. The company has began reposition its fleet in reaction to that drop, leading to increased time off hire as spot market exposure increased..
"The decline in the long haul business, where Norgas operates, has led to a prevailing overcapacity of tonnage within the liquefied gas transportation markets for petrochemical gasses" the company stated in its earnings release. "The lack of available products from the lower cost Middle East region is compensated by 'short haul' volumes supplied by higher cost suppliers from other regions."
IMSK's outlook is positive though as it sees a future increase in demand for its fleet as a switch to using ethane as a feedstock will drive an increase in butadiene and propylene imports as well as ethylene exports. The rise of LNG exports from the US could also benefit IMSK if its fleet of six small LNG carriers finds employment distributing LNG at a regional level.
On the surface that growth expectation is reflected in the high orderbook for semi-refrigerated and ethylene capable ships, which reached 31% of the fleet in terms of cubic capacity. For IMSK however, the threat of overcapacity is less sever as it believes the orderbook will predominantly be occupied on the LPG market with vessels sizes that are not often used in long haul ethylene trades.
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