Western Bulk publishes First half 2019 results
Western Bulk has today published its First Half 2019 report.
Tough start to the year following repositioning in a difficult market
In the first half of 2019 Western Bulk (the “Group”) posted a Net TC of USD -8.8 million and a loss after tax of USD -24.8 million.
The year commenced with a dramatic drop in the Baltic Supramax Index (BSI), plunging 57 % from the start of the year to a level of USD 4,837/day in February – levels not seen since the BSI posted its all-time low early 2016. Although recovering slightly thereafter, the market has remained low until just recently rebounding in July. The Group results were impacted by not foreseeing the magnitude of the sharp market fall, combined with a slower than expected market recovery.
The Company’s challenges in Chile have continued to hamper the results with a negative Net TC contribution of USD -7.5 million in the first half of the year, whereof USD -5.3 million in the first quarter. As several contracts expired in the first quarter, the losses were limited to USD -2.2 million in the second quarter.
In April Western Bulk raised USD 15 million in equity from its two main shareholders, Kistefos AS and Ojada AS. Given that the shares are trading below the subscription price of NOK 41,00, the Board of Directors has resolved to cancel the Subsequent offering.
The outstanding bond loan of NOK 300 million was fully repaid in April, and a more optimal financial structure has been agreed with the company’s lending bank.
In June Western Bulk took a leap towards data-supported decision-making by partnering up with world-leading maritime innovation company CargoMetrics. By utilizing existing and new data sources in smarter and more efficient ways, Western Bulk aims to take advantage of both long-held domain knowledge and disruptive technologies whilst continuing being a leading dry bulk operator helping the shipping industry move in the right direction.
“In recent times Western Bulk has been hit by a streak of unfortunate events, overshadowing the underlying performance and potential of the Group. With Chile restructured, enhanced risk measures, data-supported decision making and strengthened management with Hans Aasnæs joining the company from 1st of July we are confident that Western Bulk will prosper. As the majority shareholder, Kistefos supported Western Bulk through the equity issue in April and is also prepared to support Western Bulk and its new management in the future”, states Bengt A. Rem, Chairman of the Board of Western Bulk and CEO of Kistefos AS.
In July market rates have increased significantly with the BSI above $11,000/day. Western Bulk has been positioned to benefit from an increasing market and the Group expects to deliver a profit after tax in the second half of the year. Losses in Chile are expected to continue, but to be somewhat lower than in the first half of the year as several contracts expired in the first quarter.
Please see the attached First half year 2019 report for more information.
For more information, please contact:
Hans Aasnæs, Chief Executive Officer
Tel: +47 922 53 957