Result after tax amounted to SEK 20.6 (20.9) million, while cash flow from operations, EBITDA, was SEK 61.8 (57.5) million.

The product tanker market continued to strengthen in the early part of 2012, albeit from low levels. The average freight rate on the open market was approx. USD 10,000 per day. There was a strengthening of freight rates in the larger tanker segments as well.

Concordia Maritime's business operations have developed in line with our expectations. The freight rates for timecharter contracts for the P-MAX and panamax tankers continued to be higher than the rates on the open market and generated an average of just over USD 20,000 per day.

The two P-MAX vessels operating on the open market had an average income of approx. USD 14,000 per day.

All the vessels have operated well.

Redelivery of vessels

After the end of the quarter, negotiations were initiated with Argo Shipping with regard to the early redelivery of the two P-MAX vessels Stena Primorsk and Stena President. The contracts were due to expire in 2016/2017, but redelivery of the vessels is very likely to be in the second quarter instead. The background to the early redelivery is a situation of financial difficulties at Argo Shipping.

This means that charter coverage for the full year 2012 will decline from approx. 75 percent to 65 percent.

Some compensation will be received from Argo Shipping, which means that earnings for 2012 will not be affected significantly. As the charters’ lease level is considerably above current market levels, this may have an effect on earnings from 2013 onwards.

Future prospects

It remains our view that we can expect a slow and gradual improvement for the product tanker market from current levels. There are good prospects for a market in better balance in 2012 and even more so in 2013. Looking at the product tanker segment, there are many positive parameters – growth in the fleet has declined while demand for transportation increases.

Our own financial position continues to be stable, with capacity for further investments if the right business opportunities arise.

Forecast for 2012

Our business is in the process of change. About 65 percent of the fleet's total number of income days are still covered by contracts. However, as we have more vessels on the open market than in 2011, we expect a reduction in income and therefore a lower profit for 2012. We have refrained from making a forecast in absolute figures.

Result before tax for the full year amounted to SEK 76.3 million, which is in line with our forecast. Cash flow from operations, EBITDA, amounted to USD 37.3 million. Against the backcloth of very weak markets for tanker shipping in general, this was a relatively good year for Concordia Maritime. The earnings level on our fixed contracts was just over USD 20,000 per day, which is considerably higher than current market levels.

The vessels have performed well and we have not encountered any accidents or other incidents. We took redelivery of two vessels from long-term contracts during the year and they are now employed in the open market. The two vessels have also been upgraded to enable them to transport vegetable oils (IMO III classification).

Fourth quarter

The scheduled drydock, conversion to IMO III and the required positioning journeys had a negative impact on fleet income during the fourth quarter.

The loss in operating income during the quarter was largely offset by an insurance payment arising from damage to one of our former V-MAX-type VLCC vessels.

Result after tax amounted to SEK 25.9 (18.9) million, while EBITDA was USD 9.1 (8.3) million.

Future prospects

The imbalance between supply and demand continues in all tanker shipping segments. In the product tanker segment, growth in the fleet has slowed considerably, and many parameters relating to demand now appear positive. The expansion of refinery capacity in Asia and the increase in oil trade in South America and Africa are examples of factors that are creating new dynamics in transport flows. All in all, this leads us to expect a gradual improvement from the existing freight levels during 2012 and 2013.

Forecast

Our business is undergoing a change. Most of the vessels in the fleet are currently signed to charters, with relatively predictable earnings and cash flows. As the contracts expire and the ships start to be employed on the open market instead, the market’s overall development will have a greater impact on our earnings and cash flow.

We currently operate two vessels on the open market and two more will be redelivered to us in the fourth quarter of 2012.

Although we expect the market to strengthen during the year, we do not believe that freight rates will reach our average time charter rates, which are approx. USD 20,000 per day.

About 75 percent of the fleet’s total number of income days are still covered by contracts. However, given the fact that we have more vessels on the open market than in 2011, we expect a reduction in income and therefore a lower profit for 2012. We do not provide a forecast in absolute numbers.

Concordia Maritime’s result after tax for the third quarter amounted to SEK 20.1 (17.7) million, while EBITDA was USD 10.9 (7.5) million. Market development in tanker shipping remained weak. The freight rates for the time-charter contracts for our P-MAX and panamax tankers continued to be much higher than the rates in the open market and generated an average of just over USD 20,000 per day. Concordia Maritime’s result after tax for the third quarter amounted to SEK 20.1 (17.7) million, while EBITD Awas USD 10.9 (7.5) million. Market development in tanker shipping remained weak. The freight rates for the time-charter contracts for our P-MAX and panamax tankers continued to be much higher than the rates in the open market and generated an average of just over USD 20,000 per day.

During the quarter, the Stena Performance and Stena Provence entered into the open market with our partner Stena Weco. On average, the vessels generated income of approx. USD 9,000 per day. After their redelivery from previous customers, the vessels have been positioned to adapt to Stena Weco’s cargo system. The positioning voyages have meant a loss of income, although this has been offset by compensation from Total in connection with the early redelivery of Stena Provence.

During the quarter, two of our jointly owned vessels, Stena Poseidon and Palva, sailed the Northeast Passage between Murmansk in Russia and the Pacific Ocean for the first time. The voyage, done by our J/V-partner Neste Oil, took 20 days to complete, which is about half the time using the normal route through the Suez Canal. The vessels were escorted by a Russian nuclear-powered icebreaker and local pilots. Ice conditions along the route place high demands on both ships and crews.

Future prospects

Tanker shipping is currently going through a testing time. The big challenge for the market as a whole remains to achieve a better balance between supply and demand for transportation of oil and petroleum products.

The imbalance was even greater during the period, with declining rates in all segments. The largest decline was within the crude oil segment, above all for VLCCs, where direct costs are now sometimes exceeding income. In the MR segment, rates also fell, although not as dramatically.

Consequently, we stand by our earlier assessment. 2011 will be another weak year, while 2012 and, in particular, 2013, show good prospects for a market in better balance for the MR-segment. Growth in the world tanker fleet is expected to decline during the current year, particularly in the area of product tankers.

Our financial position continues to be stable, with capacity for further investments if the right business opportunities arise. Larger part of the fleet will also be chartered on fixed contracts during 2012 but we already have two vessels operating on the spot market. And we are working continuously on making our ships as competitive and flexible in the market as possible. As part of this work, Stena Provence will be converted to an IMO III vessel in the fourth quarter. The conversion means the vessel will also be able to transport vegetable oils. Transportation of vegetable oils is currently a niche segment of the tanker market. Stena Performance and Stena Premium have already qualified for IMO III classification.

Unchanged forecast for 2011

Our assessment remains unchanged, Concordia Maritime will achieve a result before tax of USD 10–13 million, equivalent to SEK 65–85 million, in the 2011 financial year, depending on how the market develops.

The company’s business operations and the market developed in line with expectations during the second quarter. Concordia Maritime’s result after tax amounted to SEK 17.9 (20.9) million, while EBITDA was USD 8.5 (7.7) million. The slightly lower EBITDA figure compared with the first quarter is a consequence of three ships in the fleet having undergone planned docking.

Comments on the result

The second quarter of 2011 continued largely as expected. The market remained generally weak and this was particularly noticeable towards the end of the quarter, when freight rates in all tanker market segments fell sharply. This was largely due to the continuing imbalance between supply and demand, a decline in American imports and general uncertainty regarding global economic development.

The freight rates for our own time-charter contracts for the P-MAX and panamax tankers continued to be much higher than the rates in the open market and generated an average of just over USD 20,000 per day.

During the quarter, three vessels, Stena Primorsk, Stena Performance and Stena Premium, were taken in for scheduled docking. This included five-year drydocking and upgrading of the latter two vessels to IMO III tankers. The conversion means the vessels are now able to transport vegetable oils. This will increase their flexibility in the market, which in turn may increase earnings potential. Transportation of vegetable oils is currently a niche segment of the tanker market, but may increase in importance as demand increases.

During the quarter we took delivery of Stena Premium, the tenth and last in the series of ordered P-MAX vessels. The redelivery of the suezmax tanker, which had been chartered together with Stena Bulk since May 2010, means that we are only active in the MR segment at present. In July, an agreement was reached with our customer.

Total for the early redelivery of one of the four vessels they charter from us, in return for compensation. We expect the vessel in question, Stena Provence, to be employed on the open market from August. Planning is underway to also upgrade this vessel to IMO III in autumn.

Future prospects

We stand by our earlier assessment that we can expect a slow and gradual improvement for the product tanker market from current levels. 2011 will probably be yet another weak year, while in 2012 and, in particular, 2013, the prospects for a market in balance are good. The big challenge for the market as a whole remains to achieve a better balance between supply and demand for the transportation of oil and petroleum products. In very simple terms, it could be said that demand for oil transport is high, but the supply of new tonnage has been even higher so far. Growth in the world tanker fleet is expected to decline during the current year, particularly in the area of product tankers. Our own financial position continues to be stable, with capacity for further investments if the right business opportunities arise.

Forecast for 2011

Our assessment is that Concordia Maritime will achieve a result before tax of USD 10–13 million, equivalent to SEK 65–85 million, in the 2011 financial year, depending on how the market develops.

The trend during the first quarter of the year was as expected as regards both the company’s activities and the market. Concordia Maritime’s result after tax for the first quarter was SEK 20.9 (22.9) million and EBITDA SEK 57.5 (51.2) million.

Comments on the result

By and large, 2011 began as expected. The product tanker market gradually strengthened, particularly towards the end of the quarter. It is worth bearing in mind that the market has improved from very low levels. The market in the large-tanker segment continued to be weak.
Concordia Maritime’s business activities have developed as anticipated. The freight rates in the time charter contracts for the P-MAX and panamax tankers continued to be much higher than the rates in the open market and averaged just over USD 20,000 per day.
All our vessels have performed well. During the quarter, one tanker, the Stena Provence, underwent its obligatory 5-year inspection. As in the case of last year’s drydocking of the Stena Paris, there were no negative surprises. The tanker is in good condition.

Future prospects

An imbalance between the supply of and demand for tanker transportation is resulting in weak markets. Put very simply, one could say that the demand for oil transport is high, but supply has so far been even higher. This year, the growth rate of the world tanker fleet is expected to decrease, not least in the case of product tankers. As regards demand, there are many positive parameters.
We stand by our earlier assessment that the product tanker market will slowly and gradually improve from current levels. 2011 will probably be yet another weak year, while in 2012 and, in particular, 2013, the prospects for a market in balance are good.
Our own financial position continues to be stable with the capacity for further investments if the right business opportunities arise.

Forecast for 2011

In 2011, we will be exposed to some degree to the open market. During the summer, one P-MAX tanker will be redelivered from its charter and during the first two quarters, our exposure is in the form of two tankers chartered in, a suezmax and an aframax tanker.
Our assessment is that in the financial year 2011, Concordia Maritime will achieve a result before tax of USD 10–13 million, equivalent to SEK 65–85 million, depending on how the market develops.

During the fourth quarter, Concordia Maritime’s business activities continued to develop according to plan. The result after tax amounted to SEK 18.9 (30.2) million and the EBITDA was SEK 56.0 (41.8) million.

Comments on the result

The tanker markets continued to be weak during the fourth quarter.
When summing up 2010, we can note that, just as expected, it was yet another weak year. During the year, the average freight rates on the spot market were barely USD 9,000 per day for product tankers and around USD 28,000 per day for suezmax tankers.

Despite the weak market, it was a good year for Concordia Maritime. The company’s business activities developed according to plan and generated a positive result that was somewhat better than expected. The freight rates in the charter contracts for the P-MAX and the panamax tankers continued to be much higher than the rates on the open market. On average, the charters generated just over USD 20,000 per day.
All our vessels performed well and we did not have any accidents or incidents.

Future prospects

The determining factor behind the weak market trend is a sharply increasing tanker fleet, which has resulted in an imbalance between supply and demand. In the last two years, supply has outstripped demand by a wide margin although the fleet will grow more slowly in 2011. In terms of demand, most of the parameters appear to be positive. Our assessment is that the product tanker market will slowly but gradually improve. 2011 will probably be yet another weak year, while the prospects for a market in balance are good in 2012 and particularly in 2013.
Our own financial position continues to be stable, giving us the capacity to make further investments when the right opportunities arise.

Forecast for 2011

In 2011, Concordia Maritime will be exposed to some extent to the open market. A P-MAX tanker will be redelivered from its charter during the summer and during the first two quarters, our exposure is in the form of a chartered suezmax tanker and a chartered aframax tanker.
Our assessment is that in the financial year 2011, Concordia Maritime will achieve a result before tax of USD 10–13 mil- lion, corresponding to SEK 65–85 million, depending on how the market develops.

Yet another quarter with business activities and results according to plan is now at an end. The result before tax was SEK 18.8 (–135.0) million and EBITDA SEK 54.2 (25.8) million.

Comments on the result

Generally speaking, the tanker markets continued to be weak in all the segments. Once again, it can be noted that although the demand for transportation of oil is growing, the growth in the number of tankers doing the transporting is greater.

Freight rates for product tankers (MR) rose somewhat compared with the previous quarter, both on the open market and the time charter market, although from very low levels. For Suezmax tankers, the trend was the opposite, i.e. freight rates dropped sharply.

The whole of our owned product tanker fleet is signed to long-term charters, which means that despite the market situation, we are doing well. The freight rates in the charters for the P-MAX and Panamax tankers continued to be far higher than on the open market. On average, the charters have generated just over USD 20,000 per day, which can be compared with around USD 8,000 per day for MR tankers on the open market.

The low rates for Suezmax tankers affected the revenue generated by the chartered tanker Yasa Scorpion. Up until the end of the quarter, the charter in which we have a 50 percent share generated a small surplus.

The trend of the result and EBITDA is thus in line with our forecast.

Future prospects

The market situation continues to be challenging and 2010 will prove to have been yet another weak year for the world’s tanker shipping companies. Companies in a weak financial position and with large exposure to the open market could face liquidity problems. There are also companies in the sector with strong finances and a balance between charters and exposure to the market that will manage better – and from this perspective, Concordia Maritime is in a very good position with all its owned fleet signed to charters.

With global economic growth rising, the demand for oil in 2011 is expected to be back at the same levels as before the sharp downturn in 2008/2009. A higher demand for oil will increase the demand for tanker transportation. The growth of the tanker fleet will decrease but is still expected to be larger than the growth in demand, thus indicating a continuing weak market.

There are, however, factors that are difficult to assess and that could result in the growth in demand for oil transportation being underestimated. One of these factors is the expansion of refinery capacity in progress, particularly in India and China, and the stagnant refinery industry in Europe and North America. This could result in interesting changes in transport patterns and thereby increase the demand for transportation considerably.

Forecast for 2010

The forecast for 2010 remains unchanged. Our assessment is that in the financial year 2010, Concordia Maritime will achieve a result before tax of approx. USD 9.5 million, corresponding to approx. SEK 70 million.

During the second quarter, Concordia Maritime’s business activities continued to develop according to plan. Turnover amounted to SEK 132.7 (162.5) million with an EBITDA of SEK 58.1 (44.0) million.

Comments on the result

The tanker market during the second quarter continued to be weak. Freight rates in the product tanker segment were lower than during the first quarter. The large-tanker market was stronger during the year but weakened somewhat during the second quarter.
Concordia Maritime’s product tanker fleet is signed to long-term charters, which means that despite the market situation, we are doing well. The freight rates in these charters continued to be far higher than on the open market. The trend of the turnover and result is in line with our forecast. 

Charter of Suezmax tanker
During the quarter, a 12-month charter of a Suezmax tanker was entered into with Concordia Maritime and Stena Bulk each participating with 50 per cent.
The freight rate is USD 23,000 per day and the tanker is employed on the open market in the Stena Sonangol Suezmax Pool. Since its delivery in May, the tanker has generated a surplus.

Future prospects

The market situation is, generally speaking, challenging. Concordia Maritime is in a good position with all its product tanker fleet signed to long-term charters. This means that we have secured our cash flows for some years to come.
Our business activities are affected by the demand for transportation of oil, which, in turn, is closely linked to the global demand for oil. The demand for oil is rising and is expected to rise still further in 2010 and 2011 when it will likely be back at the same level as before the sharp drop in 2008/2009.
The world tanker fleet will continue to grow considerably in 2010 and 2011 and it is calculated that the increase indemand will only partially be able to absorb this tonnage surplus. Accordingly, we expect market conditions to be weak in 2010 and at least during most of 2011. There have been very few orders for newbuildings in the product tankersegment, which in the long term is good for the balance between supply and demand, which is a prerequisite of a stronger market.

Forecast for 2010

Our assessment is that in the financial year 2010, Concordia Maritime will achieve a result before tax of approx. USD 9.5 million, corresponding to approx. SEK 70 million.

During the first quarter, Concordia Maritime’s business activities continued to develop according to plan. Turnover amounted to SEK 107.3 (178.3) million and the result after tax was SEK 20.7 (–2.1) million.

Comments on the result
The tanker market during the first quarter was weak and, as expected, the upswing in December 2009 and January 2010 was temporary. In February, the freight rates in the product tanker market once again fell to about USD 7,000–8,000 per day. The freight rates on the time-charter markets increased somewhat.

The fact that Concordia Maritime currently has all its fleet signed to long-term charters means that despite this, we are doing well. The trend of the turnover and result during the first quarter was in line with our forecast.

Order of Suezmax tanker
During the period, an order for one new Suezmax tanker was placed with Samsung Heavy Industries in South Korea with delivery set for the second quarter of 2012. The investment amounts to just under SEK 500 million, the largest part of which will be paid on delivery. The intention is to employ the tanker in the open market.

This tanker, which will be named Stena Supreme, is part of a series of six units developed by Stena Bulk and designed by Stena Teknik. During its design, the focus was on energy efficiency. The vessel’s technical equipment and design will enable fuel consumption to be reduced by up to 10–15 percent compared with standard tonnage.

This order fits in very well with Concordia Maritime’s strategy and will be an interesting complement to our involvement in the product tanker market. The transport pattern for crude oil is changing, resulting in, among other things, longer transport distances. In this context, the Suezmax size is more flexible than e.g. VLCCs. We feel that the timing is right as the price is competitive and reflects the 35–40 percent drop in ship prices since their peak 1.5–2 years ago.

Participation in charter of Suezmax tanker
During the period, it was also decided that Concordia Maritime would participate with 50 percent of Stena Bulk’s charter of a newly built Suzemax tanker. This charter will run for 12 months following delivery from the shipyard, which is set for May this year. The freight rate is USD 23,000 per day. The tanker will be employed on the open market in the Stena Sonangol Suezmax Pool.

Future prospects
The large growth of the tanker fleet will probably result in a continuing weak market for some time. Even with an anticipated increase in scrapping, delayed deliveries and cancellations in 2010, the net growth of the fleet will be substantial.

The market situation is challenging, but we are in a good position. The whole product tanker fleet is signed to longterm charters, which means that we have secured our cash flows for some years to come. this, in combination with a strong financial position, means that we have the capacity for further investments if the right business opportunities arise.

Forecast for 2010
Our assessment is that in the financial year 2010, Concordia Maritime will reach a result before tax of approx. USD 9.5 million, corresponding to approx. SEK 70 million.

During the fourth quarter, Concordia Maritime’s business activities continued to develop according to plan. Turnover amounted to SEK 111.2 (168.1) million and the result before tax was SEK 18.6 (28.9) million.

Comments on the result
During the quarter, the tanker markets continued to be very weak although they recovered somewhat in December. A general increase in demand together with the cold winter all over the world, resulting in declining stock levels, contributed to a higher demand for oil shipments. In part, this upswing should be seen as seasonal rather than a long-term sustainable improvement in the market.

When summarising the whole 2009, we can note that it was one of the weakest years for a very long time. The average freight rates on the open freight market fell to less than half the average in 2008. The time-charter market also weakened considerably, although not quite as much.

The fact that Concordia Maritime has all its fleet signed to long-term charters means that despite this, we are doing relatively well. The trend of the turnover and result for the full year is in line with our revised forecast. The result generated by our business operations has developed according to plan. However, the full result for the year is burdened partly by the capital loss on the sale of the shareholding in General Maritime and partly by the write-down of the holding in the fund Weavering Capital. With these nonrecurring cost items, charged to the result in an amount of approx. SEK 175 million, the result for the year is SEK -91.0 million before tax. This shows that despite weak or very weak markets, our position within long-term charters is generating a positive result from our operations.

Future prospects
Despite an anticipated increase in oil consumption as a result of a recovery in the economy, the large growth of the tanker fleet will probably result in a continuing weak market for some time. Even with an anticipated increase in scrapping, delayed deliveries and cancellations in 2010, the net growth of the fleet will be substantial.

The market situation is difficult, but we continue to feel that we are in a good position. The whole fleet is signed to long-term charters, which means that we have secured our cash flows for some years to come. This, in combination with an otherwise stable economy and a strong financial position, gives us the capacity to act swiftly when opportunities for new business deals arise.

Forecast for 2010
Our assessment is that in the financial year 2010, Concordia Maritime will reach a result before tax of USD 9.5 million, corresponding to approx. SEK 70 million.