Ultrabulk Takes Action On Fuel Efficiency, Swings to Profit in 2012

Ultrabulk is ordering more efficient ships and improving fuel us in its existing fleet

Danish shipping firm Ultrabulk Shipping A/S (Ultrabulk) says it achieved an after-tax profit of $14.1 million after losing $4 million in 2011, although its revenues for the year dropped 9 percent to $692 million due largely to lower freight rates.

"Despite the challenging shipping market characterised by low world economic growth and record high tonnage deliveries a sound financial result was achieved in 2012," the company said.

The company said its long-term cargo book, arbitrage business margins, and risk management efforts helped it weather the year.

The company took action on improving fuel efficiency in 2012, including ordering five new generation eco vessels.

Ultrabulk ordered a handysize bulker that is expected to reduce fuel use by more than 15 percent, and it cancelled orders two non-Eco vessels, replacing them with an eco Supramax.

The company said it is also working on technical efforts to improve core fleet emission and fuel consumption levels, evaluating measures including retrofitting, auxiliary equipment, and improvements to main engine performance.

In 2013, the company said it will focus on developing  more tonnage to increase earnings and expand its drybulk platform.

"Although a number of indicators suggest that economic growth will strengthen during 2013 and demand is expected to grow with Chinese imports of raw materials, Ultrabulk expects continued pressure on operating earnings in 2013," the company said.

"Uncertainties are linked to the freight rate level which is expected to be lower than 2012 and counterparties' ability to pay as counterparty risks are expected to prevail.

"The uncertain economic outlook and the continued pressure on vessel prices, however, also leads to opportunities and focus is to secure long term tonnage at the right time."