Bocimar sees red

Bocimar turned in a first-quarter loss Thursday but the Belgian bulker operator is confident the tides will turn in the months ahead.
Bocimar's newbuilding backlog includes three capes that are due for delivery in 2016.

Bocimar's newbuilding backlog includes three capes that are due for delivery in 2016.

Compagnie Maritime Belge (CMB) said its bulker arm carded a $4.4m deficit in the three months to 31 March, versus a loss of $0.8m in the comparable period a year prior.

In the Antwerp-based company’s earnings report it noted the first-quarter was “characterised by seasonally low freight rates” despite “generally held optimism”.

Bocimar’s fleet of capesize bulkers watched daily earnings drop to $22,740 from $25,075 year-on-year, a decline CMB blamed on “high volatility” in the segment.

“The cape market was once again affected by amongst other things weather-related factors and the effects of a disruption in coal exports from Colombia,” it said.

“However, the main cause of the disappointment originates from the lack of Brazilian iron ore exports that were down by 25% on the previous quarter.”

In the panamax, supramax and handysize segments CMB said daily earnings averaged $10,342, $7,875 and $10,254, respectively, in the first-quarter of this year.

Twelve months prior Bocimar’s panamax, supramax and handysize bulkers logged day rates of approximately $7,690, $7,800 and $7,557 on average, respectively.

Today, CMB pointed out that supramaxes were hit particularly hard by the Indonesian ban on the exportation of processed minerals like nickel ore, iron ore and bauxite.

While freight rates were lacklustre across the board the company is confident the dry-bulk market will improve in the second-half of 2014 and full-year 2015.

“This optimism is founded on an active period market for periods of up to two-years, strong FFAs for the third and fourth quarters of 2014 and a second hand market, with very strong prices paid for older capesize vessels,” CMB continued.

The owner, which was quick to point out that the market value of Bocimar’s fleet has increased by more than 10% since the start of 2014, said it is well positioned to cash on a rebound in dry-bulk due to its exposure to the spot market.

While CMB is optimistic about the near-term health of the space it also acknowledged that an upturn remains heavily dependent on China’s appetite for iron ore, an increase in import volumes and moderate fleet growth this year and next.

As TradeWinds has reported, many equity analysts use Bocimar's freight rate updates as a guide when trying to predict the performance of compatriots since CMB is typically the first publicly-traded bulker owner to file quarterly reports.

CMB is led by chairman Etienne Davignon and its shares trade on NYSE Euronext Brussels. You can read its latest earnings report in full by clicking on the link located under the Related Media section to the right of this article.

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