Bunker Price Jump of "Some 60%" Weighs on d'Amico TCE Earnings

by Ship & Bunker News Team
Friday August 19, 2016

d'Amico International Shipping S.A. (DIS) says that a big jump in bunker prices throughout 2016's second quarter were among a number of other factors that weighed on time-charter equivalent (TCE) earnings during 1H 2016.

DIS reports that TCE earnings were $144.5 million in the first half of 2016, compared to $158.1 million during the same period of 2015, while second quarter time charter equivalent earnings (TCE) amounted to $69.4 million, compared to $81.2 million during the same period the previous year.

DIS noted Q2 crude prices had been rallied by a decline in refinery throughput, not least because of unplanned disruptions in Nigeria and Canada as well as declining U.S. production.

"As the oil price recovered so did the price of bunkers, which increased some 60 percent throughout the second quarter," it said.

In addition to high refined products inventories, DIS CEO Marco Fiori explained that despite a "good level" of demand in the second quarter earnings were also affected by an increased number of newbuildings entering the market in the first half of the year, with close to 70 more MR tankers trading in the Atlantic basin compared with the same period last year.

"Despite some temporary volatility that might negatively hit the market especially this year, I am convinced the above factors which caused some turbulence in Q2, are only seasonal and I am still convinced the product tanker industry has very good fundamentals and is set on the right track in the long term," said Fiori.

DIS' EBITDA for the first half of 2016 was $40.2 million, down from $45.1 million in the same period of 2015, while net profit was $13.6 million, down from $30.1 million last year.

In November, Fiori called 2015 Q3 "one of its best quarterly results" after DIS posted a net profit of $14.7 million, compared to $0.3 million during the same quarter in 2014.