Awilco LNG posts higher profit in Q4

Norway-based shipping firm Awilco LNG, the owner of two TFDE 156,000-cbm carriers, reported a rise in both its quarterly net profit and freight income.

The company said on Friday its net profit reached $5.8 million in the October-December period, compared to $1.2 million in the same quarter last year. Net profit also rose from $5.1 million in the previous quarter.

Freight income for the fourth quarter totaled $14.5 million, a rise from $11.1 million in the fourth quarter of 2020 but also from $14.3 million the firm logged during the prior quarter.

For the entire 2021, Awilco LNG reported a net income of $21.1 million, compared to a loss of $7.9 million for the previous year. Freight income rose to $57.1 million in 2021 from $30.7 million in the year before.

Awilco LNG’s carriers WilForce and WilPride are under charter following mid-term contracts in April and June last year. Their charters will end at the beginning of the second quarter.

Average TCE for both vessels in 2021 reached 78,200 per day, Awilco LNG said.

Overhaul and focus on securing vessel employment

During this year the company will perform overhaul of two of the main engines on each vessel at a total cost of approximately $2.9 million.

The overhauls would have a “limited effect” on profit as the cost would be capitalized and amortized over the next four years, Awilco LNG said.

Chief executive Jon Skule Storheill said that throughout the fourth quarter Awilco LNG had continued to deliver “strong results” on the back of its fixed rate contracts for both vessels.

“This is set to continue until the start of second quarter 2022 and earnings can be expected to remain at this level through the first quarter 2022,” Storheill said.

LNG charter rates nosedived in January when compared to their record highs in November.

Storheill said the market has experienced a seasonal downturn earlier than normal, mostly on the back of negative arbitrage between European and Asian gas prices, leading to shorter sailing distances and more open freight capacity in the market.

“We expect this to turn later in the quarter and focus on securing the next employment for the vessels,” he said.

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