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Mercator Lines widens first half loss

Mercator Lines widens first half loss
Dry bulk shipowner Mercator Lines has widened its loss for the first half of its financial year as freight rates fell and operating expenses rose.

In the first half ended 30 September 2015, Mercator Lines posted a loss of $21.77m, a larger deficit from the loss of $13.42m in the same period of 2014.

First half revenue decreased by 44% year-on-year to $17.2m due mainly to the fall in spot/contract rates and sale of a vessel during the first quarter of the financial year.

“The freight market has been volatile due to a combination of demand weakness and capacity abundance,” Mercator Lines commented.

“Fundamentally the market remains oversupplied with vessels as scrapping activity slows and concerns over reduced economic activity and slower demand from China,” it said.

The shipowner also recorded increased operating expenses due to uncertainty on account of the restructuring process. This has impacted its business “adversely in terms of higher operating costs and contracts for the ships including the possible idling of some of the ships.”