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Why the shipping industry will likely post modest growth
Global oil demand is expected to grow. The demand record has been broken every year since 2010. Demand for 2014 is expected to be ~92.7 million barrels per day. This is 1.2 million barrels per day growth over the 2013 demand levels. The macroeconomic conditions continue to improve.
Tsakos Energy Navigation Limited’s (or TNP) management believes that the value created by its new partnerships will be profitable for the company. This will be reflected in its valuations. The company’s CEO believes that TNP performed stronger for the first half of 2014. This was mainly because it reinforced its strategy to focus on the versatile and diversified fleet in the crude sector.
For 2Q14, Tsakos Energy Navigation Limited (or TNP) recorded positive net results, higher earnings before interest, taxes, depreciation, and amortization (or EBITDA), and a strong platform for future growth. TNP is one of the largest and most recognized tanker companies in the world. It’s a leader in its sector.
TNP is positioned to benefit from the recent market turnaround. Currently, it has 33 vessels operating in crude trades—23 of the vessels are on spot and flexible crude contracts. TNP has an effective balance of vessel employment. As a result, it has solidified its earnings capabilities.
At the end of 2Q14, Tsakos Energy Navigation Limited’s (or TNP) liquidity remained strong. It had a total cash balance at $238 million—compared to $172 million at the end of 2013. Its total indebtedness stood at $1, 360 million—$17.8 million less than at the end of 2013.
Tsakos Energy Navigation Limited (or TNP) recorded 2Q14 total expenses of $103.9 million—compared to $99.4 million recorded in 2Q13. Meanwhile, average daily operating costs per vessel were $7,971—compared to $7,728 in 2Q13. This was led by the addition of the two new DP2 shuttle tankers. The tankers have higher operating costs than conventional vessels.
A marginal growth in its fleet size contributed to Tsakos Energy Navigation Limited’s (or TNP) revenue growth. Its fleet continued to operate at almost full utilization at 98%—the same as this period in 2013. Also, the average operating fleet increased to 48.2 vessels in 2Q14—compared to 47.8 vessels in 2Q13.
Tsakos Energy Navigation Ltd. (or TNP) is one of the largest providers of international seaborne petroleum products and crude oil transportation services. It serves national, major, and other independent oil companies and refiners. It has a mixture of long, medium, and short-term charters. Currently, the company is valued at $635.2 million in the market.
The outlook for mid-sized crude tanker fleet supply is one of the key drivers for a sustained tanker market recovery over the next few years. By 2016, the Suezmax and Aframax fleets are predicted to shrink by 2% and 7%, respectively, compared to current levels.
Teekay Tankers (TNK) completed the acquisition of its 50% joint venture interest in Teekay’s conventional tanker commercial and technical management operations for $15 million. It paid in shares.
At the beginning of the third quarter, Aframax demand was stronger than expected. As a result, spot rates in these segments scaled up to new six-year highs for July.
Spot tanker rates in the second quarter of 2014 averaged significantly higher compared to the same period last year. Suezmax rates improved by $4,000 per day or 33% year-over-year.
With its strong market view that spot tanker rates will, on average, exceed time-charter-out rates, the company is focusing on increasing its spot market exposure.
For the second quarter of 2014, Teekay Tankers’ (TNK) net pool revenues increased to $20.5 million from $15.5 million in 2Q13 due to a rise in fleet size and high TCE.
For the second quarter of 2014, Teekay Tankers (TNK) recorded net income of $4.6 million or 5 cents per share, compared to the corresponding quarter last year’s net loss of $5.7 million or $0.07 a share.
In this series, we’ll discuss how Teekay Tankers performed in the second quarter ending June 2014, its current and planned exposure to the crude tanker industry, and the outlook for Aframax and Suezmax tankers.
DRYS has received firm commitments for a total of up to $520 million from ABN AMRO and Nordea Bank. This is the first major milestone towards the refinancing of the company’s 5% convertible notes maturing in December.
There’s no denying that debt is DryShips’ main concern going forward. The company’s debt stood at a total of $6 billion at the end of the first quarter, up around $500 million quarter-over-quarter.
During the second quarter of 2014, average spot weights for large tankers—namely, Suezmax and Aframax vessels—recorded considerable gains of almost 41% and 21%, respectively, year-over-year.
During the second quarter of 2014, freight weights were significantly stronger for Capesize vessels compared to the corresponding quarter in 2013.