Pioneer Marine Posts Loss, Takes New Delivery

 

Excluding the effect of the impairment loss, net loss as adjusted would have been $22.5 million for the year ended December 31, 2015 or $0.87 adjusted loss per share basic and diluted and $6.2 million for the fourth quarter of 2015 or $0.21 adjusted loss per share basic and diluted.

 

Pankaj Khanna, Chief Executive Officer, commented, “2015 proved to be a challenging year for the drybulk industry with excess supply overwhelming anaemic demand growth, particularly in the fourth quarter. Although the Chinese official figures show GDP growth of around 7% it is widely believed that growth was much slower."

 

Iron ore and coal imports into China suffered the most as iron ore imports grew by just 2% compared to 2014 and coal imports declined by almost 30%. Most of the minor bulk commodities saw healthy growth in demand but the trickle down effect of weakness in the larger vessels impacted geared vessels. 

 

Additionally the decline in oil prices and consequently bunker fuel prices meant that charterers instructed vessels to increase speed from 12 knots to 13 knots, which added 4-5% capacity in an already oversupplied market. Couple all of the above with what seems to be a developing global recession meant that freight rates in January and February have set record lows every day.

 

On January 7, 2016, Pioneer Marine accepted delivery of a 38,464 DWT Green Dolphin eco-design handysize vessel, the M.V. Kite Bay. The vessel commenced a one year charter based on index linked rate. The charterer may extend the charter for up to one additional year.

 

During the fourth quarter, Pioneer Marine drew down on a $12 million facility with ABN AMRO Bank, N.V, Deutsche Bank AG and Norddeutche Landesbank to provide post-delivery financing of the M.V. Kite Bay with insurance cover provided from China Export & Credit Insurance Corporation (Sinosure).