President's view
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.