Precious fleet 61% covered for 2009

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Wednesday, 07 January 2009

Thai-based handy-size dry cargo specialist Precious Shipping says its fleet is 61% covered by time charters for this year. Managing director Khalid Hashim says: “As can be seen, our forward four year (2009 to 2012) rolling book is currently at the 30.91% level with a visible revenue stream of $319m. When freight rates move in an upward direction, as the BDI had done till the end of May 2008, we effectively locked in rates by putting away the spot ships for longer term charters at healthy rates. This policy was very successfully employed over the last few years and allowed us to ride out the volatile nature of the spot market with relative ease. Now that the BDI has plunged to almost all time lows we will have to wait out the current low period before re-employing this strategy in the future when the BDI starts to move in an upward direction. Till such time you should expect the strength of our forward 4 year rolling book to continue to decline.”
As of the 31st December 2008, the company's forward charter book was:
Year 2008 2009 2010 2011 2012
Total Available Days 16,104 16,060 16,524 18,076 20,046
Fixed T/C Days 15,521 9,803 5,371 3,406 2,256
%age Fixed T/C Days 96.38% 61.04% 32.50% 18.84% 11.25%
Av. T/C Rate/Day in USD 16,129 15,087 13,062 17,428 18,467
Contract value USD Millions $250.3m $147.9m $70.1m $59.4m $41.6m
Mr Hashim says: “We have fixed ship No.1 through to No.4 out of our 12 newbuilding 34,000 dwt ships to one of our existing customers for a period of 60 to 62 months +/- 1 month. The EBITDA from these 60 to 62 month contracts would amount to approximately US$26m/$27m per ship. The same client has taken an option on ship No.5 and No.6 for similar periods but at a slightly lower rate declarable before the end of March this year. The EBITDA on these contracts would be about $25m per ship per contract.”
He adds: “We have also fixed the first of our 54,000 dwt newbuildings for a min 60 max 64 month contract, the EBITDA from which would be between $39m and $43m. The cost of this ship is $38m.”