Navig8 Chemical Tankers also in the red

Feb 17 2017

Navig8 Chemical Tankers generated revenue of $33.9 mill and net loss of $3.6 mill for 4Q16, compared with a net income of $9.1 mill for 4Q15.

The decrease in net income was mainly due to lower gross average daily TCE rates achieved in 4Q16, partially offset by an increase in total operating days, compared to the same period in 2015, and increases in vessel operating expenses, depreciation and interest income related to the expansion of the operating fleet. 

The TCE rates earned by the A-Class, V-Class, T-Class and S-Class vessels in 4Q16, were $13,928, $13,959, $14,849 and $15,404 per day, respectively.  The A-Class and the V-Class vessels generated $21,654 per day and $21,440 per day, respectively, during the same period in 2015.

The company’s operating fleet continued to grow with the delivery of two 49,000 dwt IMOII Interline-coated chemical tankers, ‘Navig8 Tourmaline’ and ‘Navig8 Tanzanite’, and two 25,000 dwt stainless steel chemical tankers, ‘Navig8 Spark’ and ‘Navig8 Stellar’, in 4Q16. In addition, the company took delivery of one 25,000 dwt stainless steel chemical tanker, ‘Navig8 Saiph’, in January, 2017.

During the quarter, Navig8 Chemical Tankers entered into $54.3 mill secured loan facility to finance the construction of two 25,000dwt stainless steel chemical tankers.

"The chemical tanker market remained under pressure in the fourth quarter, driven in part by fleet growth and weakness in the clean petroleum product markets that shifted swing tonnage from the product tanker market into traditional chemical tanker trades," said CEO Nicolas Busch.

"A rise in demand for chemicals, palm oil and clean petroleum products helped to absorb incremental capacity and led to improvements in the chemical tanker market beginning in November. 

“The market is forecast to tighten in 2017 and beyond with chemical tanker demand forecast to outpace the growth in the supply of larger chemical tankers. Normal weather patterns are also expected to support palm oil exports, which decreased by 10% in 2016, due partly to the El Nino weather pattern," he said.

As of this week, 29 newbuilding chemical tankers out of 32 had been delivered. The remaining three vessels are scheduled to be delivered by the middle of this year. Upon their respective deliveries, the vessels have and will be deployed in commercial pools managed by the Navig8 Group, including the Chronos8, Delta8 and Stainless8 pools. 

On 3rd November, 2016, the company announced that it had entered into a $54.3 mill secured loan facility to finance the last two of the S-Class vessels currently under construction at Kitanihon. The loan facility covers about 65% of the contract price of the vessels and was provided by a European bank.


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