Pioneer Marine announced that with its total liquidity reaching $83.8m, the company has no more outstanding capital commitments.
“During July, Pioneer Marine received the last of the instalments that were due following the cancellation of 10 of the 12 newbuildings we ordered. We have achieved this cancellation with minimal loss and our balance sheet can now withstand any market and also positions us for opportunistic acquisitions, which we are evaluating,” said Pankaj Khanna, ceo of Pioneer Marine.
In the first half, Pioneer Marine reported a net loss of $20.63m, widening from the deficit of $10.83m in the same period of 2015, due mainly to a $11.65m write-off of capitalised expenses and fees arising from newbuilding contract termination.
First half revenue decreased to $13.49m from $18.92m due partly to lower time charter contributions in the weak shipping market.
“The first half of 2016 will be remembered for some time to come as one of the weakest periods for the drybulk industry in modern history. Freight rates bottomed in February and saw marginal improvement through the second quarter to levels barely above operating cost levels,” Khanna commented.
“Despite this increase in demand rates stayed at close to operating cost levels due to the massive oversupply built over the last decade. The pace of scrapping slowed towards the end of the second quarter and into the third, which could be attributed to the improvement in the market and the onset of the monsoon in Southeast Asia.
“Despite this slowdown the dry bulk fleet increased at the slowest pace this decade at 0.8% as of end June 2016. One positive result of the dry bulk market weakness has been the cessation of newbuild orders,” he observed.
The dry bulk vessels orderbook is slowly being worked through and combined with cancellation and delays, the net increase in the fleet is at manageable levels, Khanna believed.
“Secondhand prices surged in the second quarter with good quality Japanese assets seeing as much as 30% increase in value. Good quality Japanese built assets are in short supply and we are now seeing some vessels that were sold in February being remarketed at prices that are 30-40% above trough valuations,” he said.
Pioneer Marine currently owns 14 handysize and one handymax dry bulk carriers.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
