Gener8 Highlights Higher Rates for ECO Vessels Amid Rising Bunker Prices

Gener8 says it has become "increasingly apparent that a two-tier market exists favouring modern ECO vessels."

Gener8 Maritime, Inc. (Gener8) today, in its 2016 financial results, said that its fleet of fuel efficient ECO design vessels has been generating higher TCE rates for the company in the face of increasing bunker prices.

"Marine fuel prices have been steadily increasing over the last year, highlighting the fuel efficiency of our ECO design vessels, which have quickly become a significant driver of the favourable TCE rates we have been able to achieve in a relatively weak rate environment," said Peter Georgiopoulos, Chairman and CEO of Gener8 Maritime, adding: "we believe this advantage will become more pronounced over time."

The company reports a net income of $67.3 million for the 2016 year, down from $129.6 million during 2015.

For the three months ending December 31, 2016, the company recorded a net income of $5.8 million, down from $45.5 million during the same period of 2015.

Gener8 says it saw full fleet ECO operating days grow to 43 percent in the three months to December 31, 2016, compared to 9 percent during the same period of 2016, while ECO Very Large Crude Carriers (VLCCs) operating days rose to 77 percent of VLCC operating days in the three month to December 31, 2016, compared to 29 percent in the same period the previous year.

"As we continue to receive vessels from our newbuilding program, it becomes increasingly apparent that a two-tier market exists favouring modern, ECO vessels," saidGeorgiopoulos.

"For the second consecutive quarter, our ECO VLCCs earned between 10 percent and 15 percent more on an average daily TCE basis than our non-ECO VLCCs."

Gener8 notes it has taken delivery of five ECO newbuilding VLCCs since the end of the third quarter of 2016, including Gener8 Miltiades, Gener8 Noble, Gener8 Theseus, and Gener8 Ethos.

As Ship & Bunker reported in January, Gener8 Maritime took delivery of the Gener8 Hector, the nineteenth of 21 ECO VLCCs slated for Gener8 Maritime.

"Following the completion of our newbuilding program expected this year and assuming no further changes to our fleet, the DWT-weighted average age of our fleet will be 4.9 years, and our VLCCs will have an average age of just 2.7 years, giving us the youngest and most modern VLCC fleet among our public company peers," said Georgiopoulos.