Western Bulk Q3 results dampened by IPO expenses

The company launched an IPO on the Oslo Stock Exchange in the quarter, raising $39m and sellingfinancial assets for a further $27.2m in connection with the listing.

As the IPO was finalised in October, it falls outside of the third quarter reporting period, but $3m of related financial expenses were recorded in Q3. Fair value losses on derivatives and financial assets for the quarter were $3.8m, significantly down on the $6m gain in the same three months of last year.

The company's fleet is mostly made up of Supramax and Ultramax vessels and so earnings reflected the continued low-level rates in that sector in the third quarter, despite an upwards rate trend as October approached.

EBITDA was down from $10.9m in Q3 2012 to $7.9m last quarter as Western Bulk Chartering's Q3 net TC margin fell to $1,161 per ship from $1,621 last year, offset slightly by a fleet increase to 157 vessels from 137 between the third quarters of 2012 and 2013.

The company forecasts a positive impact on its earnings from the recent 40% hike in the Baltic Supramax Index. Immediate benefits from the rate increase will be lessened due to the high contract coverage the company has for the last quarter of this year, but Western Bulk considers itself well positioned for a potential recovery in 2014, owing to its fixed price extension options for its chartered-in fleet.