 |
Print page |
|||||||||||||||||||||||||||||||||
| Lauritzen Bulkers President Jens Ditlev Lauritzen
EBITDA in 2004 was USD 192.8 million up from USD 39.9 million in 2003. Result before tax rocketed to USD 214.7 million compared to USD 41.2 million in 2003. Expectations for 2004 were optimistic. The strategy of building up the fleet in 2002 with low cargo coverage proved successful and led to a very satisfactory result not only for 2003 but also for 2004, which was the best ever in the history of Lauritzen Bulkers A/S. Market development  The spot market averaged 4,598 on the Baltic Dry Bulk Carrier Index with peaks in February and December at above 6,100 and a low in June with the index reaching 2,718. Spot value rates in the segments in which Lauritzen Bulkers operates - the Handysize, Handymax and Panamax markets - experienced similarly volatile trends, (cf. the chart). The development was due to a tight balance in the market at the beginning of 2004, which was further tightened by port congestion in exporting and importing countries Commodity imports into China in particular rose in line with industrial development reflecting the boom in domestic and foreign demand for its manufactured goods. Over the year, the Chinese authorities implemented various measures to contain inflationary pressures, so far successfully. Some of these measures had almost immediate impact on the spot market, with a reduction in port congestion as a result. The strong market situation, which also spilled into the period and tonnage markets, has reduced scrapping. Deliveries amounted to approx. 20 million dwt. As a result, net fleet growth from year-end 2003 to year-end 2004 was almost 6%. The Capesize fleet increased by more than 8%, the Panamax fleet by 7% and the Handymax fleet by nearly 6%, whereas the Handysize fleet went up by approx. 1%. Commodity prices strengthened again at year-end and are expected to lead to further substantial increases when forward contracts are negotiated. Newbuilding orders slowed in 2004 compared to 2003. However, the current order book allows for new deliveries in the coming two years of 20-21 million dwt per year. The fleet In 2004, the total number of ship days reached 23,107 (an average of 63.3 vessels), a decrease of 6.6% compared to the 24,744 days (an average of 67.8 vessels) reported in 2003.  The owned fleet consisted of about 10 vessels at the beginning of 2005. The Handysize joint venture fleet employed an average of 48 units over the year. In terms of activity, involvement in the Handysize segment fell during 2004 and is only expected to increase once trading conditions become favourable to such a strategic move. During the year, Lauritzen Bulkers bought five second hand Handysize vessels two of which were later sold. The Handymax fleet consisted of about 12 vessels. A purchase option was exercised on Bay Bulker, 48,000 dwt which was later sold. An additional two newbuildings are to be delivered in the first quarter, both on time charter arrangements. The Panamax fleet consisted of six vessels in 2004. One long-term T/C newbuilding was delivered in October and placed on a three year time charter. At the beginning of 2005 the fleet consisted of five vessels with an additional newbuilding for delivery during the second quarter, also on long-term time charter. An additional three long-term time charter newbuildings are to be delivered during 2006, 2007 and 2009.  Events after year-end Early in 2005, Lauritzen Bulkers bought two Handysize vessels - Wavelet (27,300 dwt) and Seven Ocean (26,500 dwt) both for delivery in the second quarter of 2005. Sunda Bulker and Torres Bulker have been sold for delivery late March 2005 and Fiona Bulker has been sold for delivery in May 2005 Lauritzen Bulkers has exercised a purchase option on the 73,800 dwt Panamax bulk carrier, Santa Lucia, for delivery early April 2005. In the beginning of 2005, HandyVenture, the joint owning venture between Island View Shipping and Lauritzen Bulkers, took delivery of Durban Bulker, a 32,544 dwt newbuilding from Kanda Shipyard. Prospects for 2005 Demand for dry bulk commodities is set for further increases due to the projected upswing in the global economy. The pressure on existing suppliers of iron ore and particularly metallurgical coal has risen to levels at which new sources are coming into the market. This will support demand growth in 2005. The tightness of the market balance indicates a second year of low scrapping. With 20 million dwt expected to enter the market, fleet growth is likely to be of the order of 5%. Gradual erosion of the market balance is likely to occur during 2005. The spot market is expected to display substantial volatility in line with the previous year. The result for 2005 is expected to be very satisfactory, however not quite as strong as in 2004. Result before tax is expected to be about USD 155 million. |