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Rickmers releases half-year report

August 31 - The Rickmers Group has issued its 2016 half-year report, which confirms consolidated revenues of EUR249.3 million (USD277.6 million) - a 13.9 percent decrease compared with the same period of 2015.

HLPFI reported Rickmers' preliminary half-year results on August 12, with the shipping line attributing its drop in revenue to the "persistently strained market situation, expiring high-margin charter contracts, follow-on charters at the prevalent low market rates, lower freight earnings, and a sharper decline in capacity utilisation in the project cargo business".

The Rickmers-Linie segment posted revenues of EUR64.9 million (USD72.2 million), compared with EUR89.1 million (USD99.2 million) in 2015, and recorded a negative EBITDA of EUR5.3 million (USD5.9 million), compared with a positive EBITDA of EUR2.9 million (USD3.2 million) in the 2015 period.

During the first half of 2016, Rickmers-Linie carried 0.8 million tonnes of breakbulk, heavy lift and project cargoes, compared with 0.9 million tonnes in the first half of 2015.

Rickmers-Linie achieved an average freight rate of EUR78.4 (USD87.3) per tonne in the reporting period, compared with EUR98.1 (USD109.2) in the same period of 2015.

As of June 30, 2016, Rickmers-Linie's entire fleet comprised 15 ships, including nine core vessels and six contracted under voyage or short-term time charter agreements. Five of the nine core ships are owned by Rickmers Group, with a further four vessels owned by ship-owning funds.

In its half-year report, Rickmers stated: "Owing to overcapacities in the breakbulk and container transport sector, cargoes typical for Rickmers-Linie may not only be carried by multipurpose heavy lift vessels but also by container vessels and bulk carriers. Compounded by persistently low demand for transport capacity, this cross-segment competition led to freight rates below expectations and a reduction in forecast freight-rate revenues."

The German shipping line added that competitive pressure from container, bulk and ro-ro vessels would continue into the second half of 2016.

"The Rickmers-Linie segment does not foresee a market recovery in the second half of 2016. Existing overcapacities, particularly with container, bulk-carrier and ro-ro vessels, and the resulting fierce competition, will continue to exert great pressure on freight rates over the coming months.

"As a result of the acquisition of Nordana's project business in July 2016, Rickmers-Linie expects improved access to cargoes starting from the second half of 2016. Owing to low freight rates, however, additional revenue from inorganic growth is not compensating for revenue declines. As a result, the segment continues to forecast a fall in revenues for the 2016 financial year."

Rickmers added: "Based on the situation in the global financial markets as well as the persistently low oil price, Drewry still expects that the project cargo business will probably only start improving in the second half of 2017. With the fleet expected to remain virtually unchanged, the forecast demand for multipurpose heavy lift vessels for the 2016 financial year is likely to be 1.7 percent [compared with -2.7 percent in 2015]."

See the full half-year report here.

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