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Monday, August 31, 2009

Hellas: Ship owners retain first place in ship acquisitions with $2.35 billion invested in 2009

Saturday, 29 August 2009

Despite the still challenging financing environment, Hellenic ship owners have managed to stay on top of the global list in terms of the investments undertaken so far this year in the second hand ship market. With vessel values way below the peak levels reached about a year ago, ship owners from the leading maritime nation have invested $2.35 billion from the beginning of the year until the end of August. According to figures compiled by Allied Shipbroking this translates to 118 vessels added to Hellenic-owned fleets, with the vast majority of them being dry bulk carriers and tankers.
During the same period of last year, there had been 164 ships reportedly acquired, with their value reaching the impressive amount of $7.4 billion. Of course, at the time few could have predicted the market’s collapse which followed just a few weeks later, from the end of September onwards until the end of 2008. Today, many ship owners are wishing they had kept their cash in their pockets, since it’s exactly these investments, made at the market’s peak, which are hurting today’s profitability and are increasing costs.
During the whole of 2008, Hellenic ship owners poured a total of $8 billion in the second hand market, acquiring a total of 197 ships, even though during the fourth quarter of the year, investments were scarce, as a result of the financial and shipping crisis. An evidence of the plunge of investments is a comparison with 2007, a year of records. Two years ago, investments had reached a more than impressive $17 billion, which amounted at 445 second hand vessels.
Breaking down this year’s purchases, one notices that most owners turned once again towards bulkers, opting for a total of 88 ships for a total price of $1.76 billion, versus 96 ships costing $4.52 during the same period of 2008. This comparison proves the radical decrease of ship values, which prompted ship owners to invest again, also because they could bring the average acquisition value of their fleets down, which in turn can yield better profits, with the freight market recovering until the end of June, before going down again in August.
Owners from Hellas also acquired 22 tankers for $535 million (against 58 tankers of $2.52 billion in the same period of 2008), while they also bought 8 containerships for just $52.2 million, compared to last year’s 10 containerships, costing $326.5 million.