LNG-powered bulker owner Himalaya Shipping achieved average time charter equivalent earnings of about $34,900 per day in December 2023.
Following the conversion of the index-linked time charters to fixed time charters, all the
company’s six vessels were trading on fixed time charters last month, Tor Olav Trøim’s Himalaya said in a commercial update.
The vessels earned about $34,900 per day, gross, including average daily scrubber and LNG benefits of some $2,300 per day.
According to Himalaya, the company’s cash break-even TCE is estimated to be about $24,500 per day.
The Baltic 5TC Capesize Index averaged $37,333 during December 2023.
In November, Himalaya achieved average time charter equivalent earnings of about $33,200 per day.
9 of 12 vessels delivered
Himalaya also confirmed that it had taken delivery of three 210,000-dwt Newcastlemax LNG dual fuel newbuildings from China’s New Times Shipyard.
The company now took delivery of 9 of twelve vessels from New Times.
The vessels, Mount Bandeira, and Mount Hua, will start time charters, initially expiring in December 2026, with an evergreen structure thereafter, while Mount Elbrus will start a 22 to 26 month time charter plus an option exercisable by the counterparty for a further 11 to 13 months.
All vessels will earn an index-linked rate, reflecting a significant premium to a standard Capesize vessel, Himalaya said.
Also, the time charters also include a profit sharing of any economic benefit derived from operating the vessel´s scrubber or running on LNG, as well as certain rights to convert the time charter to a fixed rate based on the prevailing forward freight agreement (FFA) curve from time to time, it said.
“We are excited to have a sailing fleet of nine vessels which are all on charter to counterparties,” Herman Billung, contracted CEO of Himalaya, said.
He said the recent development in the freight market has shown a “much tighter balance between supply and demand than most analysts had anticipated and resulted in day-rates well above the company’s estimated Capesize equivalent cash-break even of $15,500 per day.”
“We should still experience volatility for large dry bulk carriers, but with an aging fleet coupled with a historic low orderbook, management has a constructive long-term market outlook. We have no intention to invest in new capacity, which will enable us to return most of the cash generated after debt service to our shareholders,” Billung said.