Greek Shipping News Cuts
Week 05 - 2010
Source: Safety At Sea - Magazine - News 04 Feb 2010. Fairplay latest front Cover
Greek owned fleet shrinks
---Nigel Lowry - Friday 5 February 2010
In a rare blip in the latterday expansion of Greek shipping, the Greek controlled fleet sank by about 4% in number of vessels and by about 2% in capacity during the last 12 months.
This represented a decrease of 165 vessels of 5.4m dwt from a year ago.
It was the first year-on-year reduction in strength since 2001-2002 when, according to the equivalent survey, Greeks again lost about 2% of their collective capacity and a fleet cut of some 138 vessels.
It marks only the fourth time since the surveys began in 1988 that the fleet slipped in strength over a 12 month period.
Dry cargo tonnage accounted for most of the disposals while Greek owners hung on to some categories of tanker.
The survey showed 80 less bulkers and ore carriers under Greek control than a year ago, with a capacity deficit of 4.6m dwt.
The fleet also saw significant reductions in general cargo and container vessels.
By contrast, the Greek owned oil tanker fleet grew by eight vessels and 1.3m dwt.
However, the fleet of chemical and product tankers was thinned out by 38, mainly smaller units.
The Greek flag fleet in particular was battered during 2009, the study revealed.
The home registry, which today accounts for less than a quarter of the fleet, lost 152 ships or 13.5% of its vessels during the 12 months to February.
Meanwhile Malta, the Marshall Islands and Liberia all gained significant tonnage from Greek owners.
Greeks were said to now control about 8% of all vessels in service and on order, and almost 15% of the world fleet by dwt.
In oil tanker capacity their share has increased slightly to almost 21%, while their portion of dry bulk capacity fell from 19% to 18%.
According to the data, the average age of the Greek owned fleet fell once again during the year, and stands at more than a year younger than the world fleet average.
The average Greek controlled ship is 11.6 years old, the GCC study said, compared with 20.3 years in 2000.
5 Year low prices atract companies
---TANKER companies, including General Maritime and Tsakos Energy Navigation, may expand their fleets after the recession sent ship costs to five-year lows last year.
Listed firms eyeing 2010 purchase spree as prices hit five-year lows.
TANKER companies, including General Maritime and Tsakos Energy Navigation, may expand their fleets after the recession sent ship costs to five-year lows last year.
Prices for five-year-old very large crude carriers dropped to $77.1m on December 14, the lowest level since March 2004, according to price assessments compiled by the Baltic Exchange.
Tanker purchases may increase as the economy recovers from the worst slowdown since the Second World War. Oil demand will rise about 1.1m barrels a day this year and 1.5m in 2011, US Energy Department data show.
Tsakos has $300m on hand to purchase ships, said Paul Durham, the Athens-based company"s chief financial officer.
Tsakos Energy operates a fleet of 46 ships.
General Maritime fleet of 31 ships included suezmax, aframax and VLCCs, and was down from its peak of 47 vessels in 2004, the company said.
The VLCC price assessment peaked at $162m in July 2008, and is now at $79m.
The price of smaller aframax tankers fell to $37.7m on November 9, the lowest level since January 2004.
Costs were down 51% from the peak of $77m in September 2008 although they rebounded to $39.9m on February 1.
Vancouver-based Teekay Corp, which operates 158 ships, said it has no immediate plans to acquire additional tankers for the spot market.
Newbuilding prices have also fallen. VLCCs are at $95m from $134m at the end of 2008, according to Oslo-based RS Platou Markets. Suezmaxes are now valued at $60m each from $82m at the end of 2008. Aframaxes slipped to $51m from $66m.
About 18% of last year"s expected deliveries were postponed, according to RS Platou.
He forecast weak rates in the second and third quarters and a recovery in the last three months of the year.
Source: 05 Subat 2010 Cuma 13:37, http://www.turkishmaritime.com.tr/news_detail.php?id=4630
Capital Product Partners reports lower earnings
--- (Feb 5 2010). Capital Product Partners net income for 4Q09 was $5.3 mill, or $0.21 per limited partnership unit, which is $0.07 lower than the $0.28 per unit from the previous quarter and $0.15 higher than the $0.06 per unit from the 4Q08.
Operating surplus for the 4Q09 was $10.2 mill, $0.5 mill lower than the $10.7 mill recorded from 3Q09 and $7.2 mill lower than the $17.4 mill seen in the 4Q08.
Revenues for 4Q09 were $29.4 mill compared to $37.4 mill in the same period the previous year. The fall was mainly due to the absence of profit share revenues, as the product tanker spot market remained at historically depressed levels.
Total operating expenses for the 4Q09 were $16.1 mill, including $8.2 mill in fees for the commercial and technical management of the fleet paid to a subsidiary of Capital Maritime & Trading Corp, the partnership's sponsor, $7 mill in depreciation and $0.6 mill in general and administrative expenses, compared to $15.9 mill for 4Q08.
Overall, the tanker spot market saw signs of recovery throughout the fourth quarter, Capital said.
The product tanker market experienced improved activity in the transatlantic region as a result of the seasonal recovery and the cold spell in most of the Northern hemisphere.
In addition, the increased regional products trade in the East pushed spot rates higher and as a result average spot earnings for product tankers increased considerably compared to 3Q09, but remained at low levels compared to historical averages.
These signs of improvement in the spot market were met with increased activity in the period market. A sustained rally in the spot market may underpin the product tanker period market in the short to medium run, the company said.
However, the global oil product trade and refinery utilisation remained at subdued levels and the product tanker fleet continued to grow - important factors in determining the future trends in product tanker shipping.
The Suezmax market improved during the fourth quarter with earnings reaching levels not seen since the beginning of 2009, as global oil supply rose on the back of increased demand in the East, delays in the Turkish Straits and large draws on OECD industry stocks, due to the increased seasonal demand.
This upward trend has been sustained into 2010 thus far.
As of 31st December, 2009, the partnership's long-term debt remained unchanged compared to the previous year at $474 mill and partners' capital declined to $157.1 mill following the payment of $70.5 mill of distributions to shareholders during 2009.
Current undrawn debt facilities amount to $246 mill, subject to the terms of the loans, Capital said.
Molaris snaps up aframax quartet
---A Greek player is said to have taken four tanker resales at Hanjin Heavy.
Stamatis Molaris-controlled interests have been linked to the $236m purchase of four aframax-tanker newbuildings from Dubai-based Emarat Maritime.
Empire Navigation of Greece is said to have bought the 115,400-dwt double-hull sisterships Dubai Princess , Dubai Paradise and Dubai Glamour (all built 2009) and Dubai Beauty , set for delivery this month from Hanjin Heavy Industries.
Brokers say Empire is paying $59m per ship and the deal is on subjects. Company managing director Vassilis Koutsolakos was not available for comment.
The company is also said to be the buyer of 170,000-dwt bulker Cape Pioneer (built 2005), said to have been sold last week for $54.5m.
Molaris emerged late last year as controlling the Athens-based company after it took over technical management of four 1991-built and 1992-built products tankers owned by Icon Leasing Fund Eleven LLC of the US.
But Molaris's activities have been subject to speculation since February 2009, when he abruptly stepped down as chief executive of US-listed Excel Maritime Carriers. Since then, he has been associated with a number of companies and projects, including an order for four suezmax tankers at Hyundai Heavy Industries worth $840m. Molaris-controlled entity Quest Maritime booked the 144,000-dwt tankers for delivery in 2011 and 2012. They have been chartered to Sanko of Japan for seven years with a profit-sharing arrangement attached.
For Emarat, the sale represents a loss as the ships were ordered as part of a series of five at a reported $64m each in late 2006. The last of this series, Hull 211, is set for delivery in March.
Sources close to Emarat say the company took the loss in order to free up capital to cover instalment payments for its remaining newbuilding projects.
It is unclear how many ships Emarat has on order as newbuilding records vary but some suggest it has negotiated delivery delays on some of them.
The company is currently listed with two VLCCs at Hanjin's Philippines yard for 2012 delivery. The original delivery date was the third quarter of 2011. Three 175,000-dwt bulkers are due from the same yard this year and another nine from Oshima Shipbuilding of Japan. These include three handymaxes, three panamaxes and three mini-capesizes with deliveries pushed forward to 2010, 2011 and 2013.
The majority of these orders were placed without employment lined up and brokers say Emarat has shown little interest in arranging period work for its newbuildings even after the 2008 market collapse.
The company has told TradeWinds in the past that it prefers spot-market work as it waits for markets to improve.
Emarat is a subsidiary of Dubai's Sharaf Group and cut its teeth with shipping back in 1976. It later grew into a large conglomerate with interests in retail, logistics, information-technology services, travel and tourism, real estate and financial services. Emarat itself was formed in 1990, first building up its fleet with cheap secondhand tonnage.
It now controls 10 supramax to handysize bulkers and the 299,900-dwt double-hull tanker Dubai Titan (built 1993).
By Yiota Gousas and Jonathan Boonzaier Athens and Singapore
Published: 00:00 GMT, 05 Feb 2010 | last updated: 09:00 GMT, 05 Feb 2010
OSG promotes from within
Overseas Shipholding Group (OSG) has announced several management changes.
These include Janice Smith who has been appointed to the newly created role of chief risk officer.
Smith is now responsible for assessing, managing and mitigating key areas of global enterprise risk.
She joined OSG in 2007 as deputy general counsel and during her tenure has focused on critical business matters, including the recently announced restructuring and settlement agreement with American Shipping Company and contract terminations with Bender Shipbuilding & Repair.
Current vice president new construction - William Nugent - has been promoted to head up the company's new Technical Services Group (TSG).
The TSG is responsible for providing ongoing technical support to OSG's fleet, managing new construction, overseeing the company's technical compliance with changing regulatory requirements, handling engineering-based new projects and reviewing new market opportunities.
Nugent will report both to Captain Ian Blackley, senior vice president and head of international shipping operations and Captain Robert Johnston, senior vice president and head of US Flag shipping operations.
Finally, Captain George Dienis, has been appointed vice president of OSG Ship Management. Captain Dienis has been managing director and COO of OSG Ship Management (GR) since 2005, a position he retains.
In his new capacity, he is responsible for technical management of the company's international flag product carrier fleet, which totals 45 owned, operated and newbuild vessels.
Source: (Feb 5 2010)
Players 'pretty happy' with the way the P&I system works
--- The Greek shipping community, and indeed most of those involved in the protection and indemnity sector, seem pretty happy with the way the system is now functioning. Shipowners and most of the P&I representatives at the recent debate in Piraeus on P&I voted strongly against club mergers, and called for firm resistence to pressure from regulators, credit agencies and others, to build up excessive free reserves.
Though a couple of club managers argued mergers could deliver economies of scale, improve service levels and reinvigorate the P&I system, the audience at the Piraeus Marine Club's 10th P&I conference liked the diversity offered by the International Group (IG) clubs 'baker's dozen'. The bulk of the audience also liked hearing club representatives saying clubs should not grow larger and larger reserves because of outside pressure, but rather seek "the correct level to meet a club's needs".
American Club ceo, Joe Hughes said the IG's 13 members had a "Goldilocks" character, so there were clubs that were not too big and not too small, and this so suited all sorts of shipowners. Indeed, he claimed the megaclub was "demonstrably bad" and conjured up an Orwellian "Brave New World" extinguishing choice through the "tyranny of the majority". He said the current system with pooling of claims joint purchasing of reinsurance and "brains trust" co-operation between the clubs already delivered all the benefits of scale of megaclubs. Consolidation into fewer clubs would be "pointless and harmful to owners" said the American.
Swedish Club's Lars Rhodin warned there was no correlation between size and efficiency, indeed "maybe there is the opposite". P&I was all about execution and value for money, while Elysian Insurance Services' analyst Roger Ingles said little "if anything" would be gained in cost savings. He noted IG members has administrative costs of $182m in 2009, just 6% of normal premium income, and "any savings would not make that much difference".
Steve Roberts, of A Bilborough, manager of the London Club, felt a move towards a small number of mega clubs would result in the IG breaking up, as the "plain reality is the fewer players there are, the less co-operation". He said a bigger organisation always struggled to preserve personal relationships.
It was noted that over the past 30 years only three mergers had taken place, and they had been triggered by financial failures.
Mike Salthouse of the North of England said that merging with the Liverpool & London and the Newcastle P&I clubs gave the North a platform to keep growing. A club couldn't stand still but had to develop and while not arguing for consolidation into four or five clubs "but perhaps nine or 10". He said costs will be saved and no doubt there will be job losses, but it would mean there were fewer people "feeding off freight rates".
With club reps telling the conference that regulartors are calling for the sector to hoard cash, shipowner George Gourdomichalis, of G Bros Maritime, attacked regulators and rating agencies for telling shipowners how big club free reserves should be. He said regulators and rating agencies have a "very limited, near sighted, big brother, holier than thou attitude" to be deciding what the correct level of capital the P&I clubs needed. He said they "fail utterly to understand the system of mutuality or that members of a club guarantee the financial solvency". Noting ,clubs collected a total of over $8bn of premium and had free reserves in excess of $2bn "a ratio of income to equity of 25%" Gourdomichalis wondered "how many insurance companies especially after the credit crunch actually have such amounts of free equity or cash in the bank".
Gard vp, Rolf Roppestad said it is important for clubs to find the correct level of reserves to meet needs as "this contributes to stability and predictability for the shipowner". He said there is a healthy choice of different level and different policies to be found among IG members.
UK P&I Club's Rod Lingard, said reserves will be greater than before as today governments have a lower tolerance of failure. The regulators and club members were also calling for a club to have adequate reserves. "The mutual model is fine" said Lingrad, but that "the ability to rely on supplementary calls is not enough".
-- Filed: 2010-02-01
Cyprus House awaits EU approval of new shipping tax
The new taxation package will help to upgrade and maintain the existing tax legislation, to help Cyprus develop into an even bigger shipping centre internationally and upgrade even more the quality of its merchant fleet, House President Marios Garoyian said in his address to the annual dinner of by the Cyprus Shipping Chamber.
Garoyian noted that Cyprus will be able to offer a very competitive operational framework for all types of shipping companies. He added that in its over 20 years of existence, the Shipping Chamber has been transformed into an important shipping organisation and has gained the reputation as a reliable partner of the state on all issues concerning Cyprus shipping.
He said that the significant and multifaceted technical know-how and expertise that our shipping industry possesses helps in the introduction and adaptation of special measures to encounter various outside factors that can have a negative impact on shipping.
On his part, CSC President Eugen Adami said that despite the current low freight market and the international shortage of finance, the future of Cyprus shipping appears once again quite promising. As he noted, Cyprus has all the experience and potential, both in terms of material and human resources, not only to continue to offer highest quality shipping services, but also to raise its position even higher as a shipping centre of exceptional importance, with a fully developed and all embracing maritime infrastructure.
Captain Adami said that with the new shipping taxation Cyprus will be able to fulfil all the necessary requirements to develop further into an even greater pole of attraction for quality shipowners, shipmanagers and charterers from both within the EU and more importantly from outside the EU.
He stressed that the Cyprus shipping industry, as an integral part of the international shipping community, will remain commited towards the protection of the environment, by applying highest safety standards and energy conservation.
President Christofias said that the shipping industry in Cyprus has managed, through timely and well-planned actions, to moderate the adverse effects of the world economic crisis.
Source: February 05, 2010 - www.financialmirror.com
Capital Link - Greek Shipping Forum - 23 February 2010
--- Capital Link Greece Shipping Forum: Accessing Capital in Today's Markets Coming out of the Crisis - Positioning for the Rebound
Tuesday February 23, 2010, 10:00 AM - 6:00 PM Athens Ledra Marriott Hotel, Athens, Greece
Global Lead Sponsor: Fortis Bank Nederland Silver Sponsor: PricewaterhouseCoopers
The 2009 Greek Shipping Forum in Athens debates the current trends in the shipping, financial and capital markets and focuses on the latest capital raising methods and various alternative funding options in a tight credit market for public and private ship owners. Also, how to manage risk in today's global and highly volatile market environment.
The Forum will also evaluate new and emerging business models by the Greek Shipowning community in response to asset value reductions and volatility in the global shipping markets.
Greek ship owners are a major force in global shipping operating more than 20% of the global fleet. Throughout the many historical downturns, Greek ship owners have been able to manage and survive weak freight markets long enough to turn losses into profits when markets improved. This could be the reason why the shipping and investor community continue to look at the behavior of Greek ship owners during peaks and troughs as they have been able to prove the art of success in one of the most difficult to predict professions in the world.
Taking a hard look at new global investment strategies and risk, the Capital Link Shipping Forum is designed as an interactive informational and networking forum for addressing a range of current opportunities and challenges specific to the shipping community but relevant to all global financiers and investors.