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Precious Shipping cancels three more newbuilds, Q1 loss widens

Precious Shipping cancels three more newbuilds, Q1 loss widens
Precious Shipping has cancelled three more newbuildings at Sanfu Shipyard, as it chalks up a $34.04m loss in the first quarter.

In its first quarter statement Precious Shipping said that it had reached amicable settlement agreements for its eight remaining newbuildings on order at Sanfu.

For four remaining ships to be delivered this year the contract price has been amended to $25m each. Of four more newbuildings, that were expected to be delayed in delivery, three have been cancelled and one is to be delivered no earlier than 10 January 2018 at an amended contract price of $18m.

Meanwhile the Bangkok-headquartered dry bulk shipowner reported a loss of $34.04m in the first quarter including $19m for the loss on sale of ships, loss on impairment and one-time write-off of deferred upfront fees related to the cancellation of loan facilities. This compared to a $10.31m loss in the first quarter of 2015.

Precious Shipping md Khalid Hashim said, “To put our Q1 results into perspective, please keep in mind that the average BDI (Baltic Dry Index) for this quarter at 360 was 50% below the lowest annual average BDI in history.”

While the BDI has rebounded somewhat to 710 points Precious Shipping is cautious about the market outlook. ‘Our feeling is that the BDI will lose momentum as scrapping rates that were at all time highs during Q1 have already started to slow down as the BDI has crept up. As a result, fewer ships are being sent to the scrap yards,” Hashim said.