Exmar’s profit up after one-time items

UPDATE: Excluding 2014 asset sales, Nicolas Saverys-led company sees 2015 profits rise 19%.

Exmar reported a 39% decline in net income for 2015 due to a capital gains on asset sales recorded the year earlier.

The diversified energy shipping firm reported consolidated 2015 net income 2015 of $41.4m compared to $68.3m a year earlier. Earnings per share saw a similar decline to $0.73 per share.

Last year's results were aided by $33.6m in capital gains from asset sales. Without those one-time gains, full 2015 net income would have risen 19%.

Last year's asset sales impacted the company's LPG segment. Excluding the one-time gain from last year, Exmar's LPG segment recorded a 47% gain in net profit to $32.3m.

Pressure on pressurised

Earnings for pressurised LPG carriers saw time-charter equivalent earnings in this segment declining to $5,473 per day in 2015, from $7,371 the year earlier.

Occasional weather-related tightness of ship availability was not able to improve income levels, Exmar said. It does see the market improving, albeit slowly, due to a newbuilding orderbook representing 3% of the total fleet and increased scrapping.

Larger LPG carriers, though, were better earners last year as Exmar noted a 13% gain in average VLGC rates to $55,255 per day and a 16% gain in midsize gas carrier (MGC) rates to $30,319.

Exmar said the 85,000-cbm BW Tokyo (built 2009) is committed until mid-2016 and Exmar plans to find time-charter opportunities afterward.

It noted the strong newbuilding orderbook for VLGCs at 35%, but says rapidly expanding export capacity and strong utilisation should keep freight rates firm.

The MGC newbuilding orderbook also appears to be at a “historically high number of vessels,” Exmar said. But Exmar said some 80% of its 2016 capacity is already booked on time charter or COA.

LNG business saw gains

Operating earnings in the LNG business were stronger for 2015 with Exmar reporting $34.5m, up $10.5m from the year earlier. Exmar said the bulk of its LNG shipping fleet remains on long-term charter, as has not been hit with the downturn in spot rates.

 It said the 138,000-cbm Excel (2003) will see its charter wind down in January, but Exmar is in discussions for its next employment.

However, Exmar’s floating LNG business is facing challenges due to project delays. The Caribbean FLNG unit, which is to be delivered in the second quarter, will have to find other employment as Pacific Rubiales continues to delay its Colombian gas export project.

Likewise, Exmar said it is waiting to find out the import duty on an FLNG barge for its Douglas Channel LNG project in Canada with AltaGas, Idemitsu Kosan and EDF Trading. Once the import duty issue has been settled, the partners “will be able to decide the way forward,” Exmar said.

In regards to the floating storage and regasification unit (FSRU) market, Exmar said it will take delivery of another such unit from Wison Offshore and Marine at the end of the year and is in discussions for its use.

It also entered a binding term sheet with Swan Energy for the positioning of at least one FSRU off the coast of Gujarat state in India as part of the Jafrabad LNG project, with the final investment decision to come in the first half of this year.

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