Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IM Skaugen focuses on costs and debt reduction as revenues drop in 2014

IM Skaugen focuses on costs and debt reduction as revenues drop in 2014
IM Skaugen lost $27.1m in 2014 as oversupply continues to impact the small gas carrier segment.

The result reverses a $18.4m profit earned in 2013 by the liquified gas transport specialist. A steep drop in the price of oil led traders to slow activity in November and wait for the bottom of the market, a phenomenon IM Skaugen believes simply delayed cargoes as activity increased again in late December.

Average earnings in the Norgas pool were around 30% lower in 2014 than 2013, and as a result revenues at IM Skaugen fell to $75.2m in 2014 from $96.2m in 2013.

The company focused on debt reduction as a means of reducing costs, an initiative that saw net interest bearing debt fall to $96.1m at the end of the year from $117.3m at the end of 2013.

Through a cost-cutting programme IM Skaugen expects to save $7m annually from 2015 compared to 2013's expenditure, although 2014 savings were lessened by a number of one-off costs.

"The challenging market conditions stem from the prevailing overcapacity of ships since the financial crisis in 2008," the company stated in its earnings release. "There are very few ships now being built in our niche of the markets and with continued recovery and growth in demand we have a positive outlook for the fundamentals within the liquefied gas transportation market."