d’Amico International Shipping posts $20.2m net loss in first half results

The Board of Directors of d’Amico International Shipping, which operates in the product tanker market, today examined and approved the half-year and second quarter 2018 financial results.

Marco Fiori, Chief Executive Officer of d’Amico International Shipping commented: “The expected recovery of the tanker market has not started yet. d’Amico International Shipping posted a net loss of $(20.2) million in the first half of 2018, hit by a very tough freight market especially in Q2. It is obviously a result we are not happy about but I would like to reiterate once again what I have been saying several times: I see no reason whatsoever why the product tanker market should not pick-up in the medium term. The long-term fundamentals are all there, showing a growing world demand for oil-refined products and limited net fleet growth expected for the next years.

“In the first six months of the year, few vessels were ordered and demolitions accelerated. The one-year TC rate for eco MR vessels stood at $14,000/day (about $1,000 less for non-eco ships) as at the end of June. This has always been the best market indicator in our industry and is significantly above the spot market, indicating operators still expect an improvement in freight rates over the next year. I think it is just a matter of some quarters before we will see again our market going back to satisfactory levels. In the meantime, we will keep focusing on the key strategic pillars that have made our Company successful over decades of activity and across different market cycles.

“We are fortunate to have benefited, and believe we will continue enjoying, the unwavering support of our banks especially since we are getting close to the end of our large fleet renewal programme. We have also received the continuing and precious financial support of our majority shareholder.

“With regards to our newbuilding programme which began in 2012, I can confirm that the prices paid for our assets are still today, in this extremely negative freight rate environment, in most cases below current prices. This, in my opinion, is another signal that the actual market cannot last much longer, also because the major regulatory change which will come into force in January 2020, limiting the sulphur content in bunker fuels, is widely expected to generate incremental demand for our vessels already starting in the second-half of 2019.

“In summary, I believe that in this difficult market we can count on some key strengths relative to most other companies operating in our sector, in particular strong banking support, a strong majority shareholder and ships ordered at competitive prices. All of these factors provide us the wherewithal to endure today’s challenging present, while looking with confidence to the future, in which we expect to continue as a meaningful player in our segment.”

Carlos Balestra di Mottola, Chief Financial Officer of d’Amico International Shipping, commented: “The first semester of the year was characterized by difficult market conditions which are clearly reflected in the results we are reporting for the period. In this adverse environment, we maintained a constant focus on strengthening DIS’ liquidity position. As already reported, during the first quarter of the year we finalised the sale and lease back of one vessel and the sale and time-charter back of a further ship, which together generated net cash proceeds of $20.3 million in the period. In addition, we recently announced the sale of one of our handy vessels and the sale & leaseback of another MR, which should generate a total of $14.3m in net cash proceeds in Q3’18. At the same time, we invested $44 million in the period, mainly in connection with the instalments paid on the newbuilding vessels under construction at Hyundai-Mipo shipyard, including one LR1 vessel delivered in January 2018. Our newbuilding and CAPEX plan is due for completion at the beginning of 2019, with two LR1s expected to be delivered in Q3 2018 and another two LR1s in Q1 2019. DIS continues to benefit from the continuing strong financial support of d’Amico International SA, our controlling shareholder. As at June 30, 2018 DIS had ‘cash and cash equivalent’ of $ 34.6 million and a net financial position of US$ (536.0) million, which represents 70.1% of DIS’ fleet market value.”