Awilco LNG sells CoolCo shares, Q2 earnings down

Norway-based shipping firm Awilco LNG, the owner of two TFDE 156,000-cbm carriers, has sold its shares in CoolCo, while it also reported weaker earnings in the second quarter of this year.

In January, Awilco bought 700,000 shares for $7 million in new LNG shipping firm CoolCo, formed by Tor Olav Troim-led Golar LNG and Idan Ofer’s Eastern Pacific Shipping.

After that, a company owned by Ofer’s Quantum Pacific Shipping bought shares in Awilco as well.

Awilco revealed in its second-quarter results report on Tuesday that it sold the CoolCo shares for $6.8 million, losing about $200,000.

“The realized loss of $0.2 million is recognized as net loss of securities through profit or loss,” it said.

Freeport LNG shutdown hits results

Awilco recently revealed a charter deal with a duration of six month with an “oil major” for its 2013-built WilForce.

The 2013-built WilPride will also start working under a three-year contract with a “leading European LNG importer” in December this year.

Both of the LNG carriers were redelivered from their fixed-rate time charter contracts at the start of the second quarter and have traded in the spot market most of the period.

“We saw upward pressure on rates in April and May until the Freeport LNG terminal in the US was temporary closed after a explosion reported on June 8, 2022,” Awilco said in the quarterly report.

The terminal is the world’s fourth largest liquefaction plant and the closure of the plant resulted in a “significant drop in shipping demand with several vessels being released to the market, putting a large pressure on rates and fixing activity,” Awilco said.

In a “challenging” spot market this has resulted in a fleet utilization for the period of 88 percent, down from 100 percent utilization for the previous quarter.

TCE earnings for the second quarter ended at $56,400 per day, down from $78,300 per day in the first quarter.

Freight income for the quarter totaled $12.3 million, down from $14.3 million in first quarter 2022, due to lower obtained rates in the spot market than on the previous fixed rate contracts, Awilco said.

Profit and earnings per share for the quarter ended at zero, down from a net result of $6 million and earnings per share of $0.05 in first quarter 2022, the firm said.

Earnings to improve from Q4

“Following six quarters with good results we experienced the challenge of running both our vessels in a more volatile than expected spot market in the second quarter,” Jon Skule Storheill, Awilco’s CEO said.

“The improving market at the end of first quarter was expected to continue throughout second quarter until an explosion and shutdown of the Freeport LNG terminal in June turned the market with several vessels being released from their contracts and available in the market during the summer,” he said.

As a consequence Awilco will have weaker earnings and lower utilization also in the third quarter.

“Despite the short-term challenges, we are fundamentally positive to the medium-term market and are satisfied with being able to secure a longer-term commitment with good earnings for WilPride. Earnings will improve from the fourth quarter,” Storheill said.

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