Rickmers Maritime Trust posted a fourth quarter loss of $8.0 million, a swing of $10.2 million from the $2.2 million profit it made in the same quarter of 2012.
The loss occurred even though its charter revenue was marginally higher year-over-year at $36.4 million and its 16 container ships were fully chartered out, mostly on long-term fixed-rate time charters.
Unlike some other charter shipowners, such as Danaos, which have been hit by a cut in charter rates by Zim, Rickmers’ earnings were hurt by other short-term factors that did not result in a loss for the full year.
Rickmers’ fourth quarter earnings were dragged down by a 2 percent increase in operating expenses and in vessel management fees mandated by contract. Also contributing to the loss was a $2.4 million provision for the layup for repairs of the Kaethe C. Rickmers container ship, which was on charter to Mediterranean Shipping Co. MSC renewed its lease on the ship following the layup for another three months from March 23, 2014, and has an option to charter it for another three months.
Rickmers’ fourth quarter earnings were also hit by what it called a “goodwill” impairment of $18.4 million that was recognized in the quarter, up from $2.1 million a year ago.
For the full year of 2013, the Singapore-based affiliate of Rickmers Group of Germany escaped the soft conditions hitting the container ship charter market because all of its fleet of ships were chartered out on fixed-rate time charters, and none were up for renewal during the year. Its fleet utilization rate stayed high throughout the year, at 99.7 percent for both the fourth quarter and the full year.
Rickmers reported a full-year profit of $23.5 million, down 15 percent from $27.6 million in 2012 on revenue that dropped by 1 percent to $143.5 million.
The shipowner said 85 percent of its fleet is covered by charters for the remainder of 2014. It said that with the majority of its fleets employed until 2015, its existing leases will continue to generate positive cash flow, “barring any unforeseen circumstances.” Rickmers’ 16 vessels are charter out on long-term contract ranging from eight to 10 years to CMA CGM, MOL, Hanjin Shipping and Italia Marittima.
Rickmers expects global trade to increase by 6 percent in 2014, compared with 5 percent growth in 2013. It sees signs of a shipping recovery this year, but said that global demand in unlikely to absorb the prevailing overcapacity in the year ahead. As a result it does not expect time charter and vessel values to begin recovering from the slump in demand until the end of 2014.