Expanding Turkey-based Atlantis Tankers has reported a drop in earnings for 2016 as chemical tanker rates have softened.
The owner's four 3,500-dwt and four 6,000-dwt ships made $4.3m on a net basis last year, down from $6.9m in 2015. Revenue fell 8.5% to $30.1m, with no significant change in operating expenses logged.
Chief executive and owner Lorenz Weinstabl said, "The results were not in line with the expectations we had for 2016, and it was hard to explain what had caused the markets to soften again after 2015, which was a year that had achieved a level we would need in consistency. There is still an oversupply of tonnage due to the orderbook that was inked in the years 2006 to 2008 and constructions which were later delayed."
"We still see delivery of such vessels in 2017 and expect the overall world fleet size in tankers below 15,000 dwt to start reducing when the ballast water treatment system and low sulfur regulations have started to kick in."
In February, Atlantis bought two tankers from the Restis Group: the 5,500-dwt Ionian Trader and Lydian Trader (both built 2008). Weinstabl said the price was "mid-$5m," as opposed to reports putting them at $7m. It also took over management of the German and Turkish-owned, 6,300-dwt tanker Rekon (built 2013) this year and has two 5,600-dwt newbuildings due this month and in June from Turkish yards.
Weinstabl said it was "amazing" to see the way many owners view their finances. Expressions such as "sustainable" are already being used to outline the minimum target of surviving in the business, he adds.
The shipowner believes companies must be looking to maintain at least the size of their fleets, or even lower their average ages. "A fleet size of 20 ships would theoretically mean that every year the fleet's aggregated age will equal the lifetime of one ship, therefore a new ship would need to be added to maintain the average age," he said. "With the current market being weak, that might just be possible when you have such a fleet size. However, it will mean that you practically need to tie all your liquidity into the modernization of your fleet."
Looking ahead, the company believes that despite the chemical tanker market having started off weakly in 2017, signs of a stronger-than-expected recovery in European and US economies still give reason to hope that this year will be better than 2016.
