Greek Dry Bulk Shipper's Profits Fall in Q1 as Bunker Costs Rise

Karageorgiou said the company anticipates a better market in 2015

Greek bulk shipping company Globus Maritime Ltd. (Globus) reports an 18 percent year-over-year drop in profits in Q1 as a weak market hurt time charter rates.

The company's revenue held steady at $7.4 million, but voyage expenses more than doubled to $1.2 million due to bunker consumption and canal and port charges for vessels travelling seeking employment.

"As a consequence our time charter equivalent rate during the first quarter of 2014 decreased by 12% to $9,248 per vessel per day from $10,550 achieved during the respective period last year," the company said.

George Karageorgiou, president, CEO and chief financial officer of the company said the dry bulk market underperformed over the quarter due partly to a delayed start in South American grain trading.

"Despite the market conditions, we did report a profit for the first quarter 2014, had a high fleet utilization rate of 99.8%, which is a testimony to our efficient in-house technical and commercial management; going forward, we maintain a positive outlook for our overall financial performance in 2014, which coincides with the recovery in the dry bulk market, with a more balanced supply and demand," he said.

Karageorgiou said the company sees an advantage in the fact that most of its vessels trade in the spot market.

"With only 29% of our fleet days secured in 2014, we are in excellent position, to maximize our revenues, in a market that many industry observers believe is poised for a turnaround," he said.

"In January 2015, following the charter expirations of the Jin Star and Sun Globe, we will have zero contract coverage, and this is significant for our company, given that the outlook for 2015 is expected to be better than the current year because demand for dry bulk commodities will outpace supply growth."

While many analysts are optimistic about the dry bulk market, Christopher Rex of Danish Ship Finance recently said a shifting Chinese economy may put a damper on recovery.