Western Bulk burns through overdraft in fourth quarter

The company's total net time charter margin per ship day was a $323 per day loss in the fourth quarter, compared to a positive $112 per day in the third quarter and a 2014 average of $431.

For the full year 2014, Western Bulk lost $57m, reversing a $5.3m profit in 2013. Operating profit was down from $15.7m in 2013 to a $7m loss in 2014.

A significant portion of the year's loss was down to $40.2m of writedowns on the value of hedge derivatives on bunkers, freight rate and currency. Of the $36m accumulated unrealised fair values losses up to the end of 2014 on bunker fuels, Western Bulk expects 90% to be reversed during the course of 2015, with the remainder recovered in 2016.

Western Bulk ended 2013 with total equity of $111.8m, and entered 2015 with $34.2m. A reduction in the price of bunkers reduced the working capital tied up in the fleet, pushing cash flow from operations into the black for the fourth quarter, despite a negative EBITDA. Total cash at the end of the year was $110.2m.

Administrative expenses were almost halved in the fourth quarter from Q3's $9.9m to $5.4m in the fourth quarter, as $4.1m in bonus accruals for 2014 was reversed.

Expectations of a stronger market in 2014 never materialised, as the Baltic Supramax Index average was down $400 for the year, and volatility remained low. The market has not recovered during 2015, as the Baltic Dry Index matched its all time low of 554 points earlier this week.