This compares with SEK215.3 mill and SEK759.7 mill, respectively, recorded in the same periods last year.
EBITDA was SEK1.9 mill ($0.4 mill) for 3Q17 and SEK41.2 mill for the nine-month period, compared with SEK50.9 mill ($5.9 mill) in 3Q16 and SEK211.4 mill in the first nine months of 2016.
The operating result was a negative SEK521.8 mill for 3Q17, against a negative SEK9.8 mill in the same period of 2016. The result after tax was a negative SEK533.1 mill, compared with a negative SEK10.6 mill recorded in 3Q16.
At the end of September, the available liquid funds, including unused credit facilities, totalled SEK442.2 mill.
During the period, the vessels were written down by $55 mill.
“We are now in the sixth consecutive quarter in which the market has been weak or even poor. One of the main reasons is record-large stock building of oil and oil products throughout 2015 and in the first half of 2016. Full inventories in the second half of 2016 and 2017 have resulted in subsequent de-stocking – leading to a reduced demand for transport. In addition, there were extensive deliveries of new vessels, the overall result of which was a situation where vessel supply exceeded demand for transport,” CEO Kim Ullman said.
“Tanker shipping is both volatile and cyclical in nature. In order to bridge periods of weak markets, there are requirements for financial sustainability and a business model that can be adapted to a specific market situation. This is the basis on which we have built our strategy.
“The weak market since the middle of 2016 did not come as a surprise to us, but was expected and we have adjusted step-by-step according to the current situation. Financially, we have strengthened ourselves through three sale & leaseback transactions and refinancing of the entire P-MAX fleet at favourable terms. The measures have resulted in a strong and stable financial position that gives us important freedom of action.
“In parallel, efforts to identify and secure niche trades for the vessels in the fleet continue. During the quarter, we signed a chartering contract for the P-MAX tanker ‘Stena Provence’. To see these efforts bringing a renewal of confidence from one of the world’s largest oil and gas companies for the fourth consecutive year is obviously very pleasing. A further three vessels on fixed and relatively good timecharter contracts are helping to secure future income. Income for the vessels employed via the co-operation with Stena Weco and Stena Bulk is higher than the market. Income for the two newly chartered MRs will also start to generate profits during the fourth quarter.
“As an effect of the weak markets during a number of quarters, market values for tankers have declined considerably. Although the P-MAX vessels continue to show better earning capacity than the market (Clarkson MR World Wide Clean Index), and despite high customer satisfaction from demanding oil companies and industry-leading vetting statistics, the market values have fallen.
“In addition to weak markets, vessels’ market values are affected by new regulations on ballast water, new regulations on bunker quality and the market’s increased focus on vessel ages. These changes concern the entire industry and it is our assessment that they have partly affected the latest market values for the vessels that the company brought in on 30th June.
“The Board has made an analysis of the consequences that these changes may have. It is the Board’s conclusion that the changes have a negative impact on the company’s future cash flows and an updated impairment test indicates impairment. An impairment loss of SEK473.7 mill has therefore been reported in the quarter.
“We can clearly see that inventory levels are falling and we expect this to translate into increased demand for oil transportation, and therefore tankers, within three to six months. On the supply side, the order book is low and net growth in new MR vessels is only expected to be 1–2% in 2018. However, the crude oil tanker order book remains. All in all, this means that we substantial expect a gradual improvement from next year.
“Our own position is stable. We have good vessels, a good contractual balance and a strong financial position that enables us to cope with the current weak market – but also to be ready to act when the expected stronger market arrives,” he concluded.