Singapore-listed Rickmers Maritime expects increased distributable income in its second quarter on the back of new vessels, with another three due later this year when it sees a gradual recovery in freight rates.
Charter rates have likely bottomed, and there might be a gradual upwards correction in container freight rates by the third quarter, a traditional peak season for container shipping, the CEO of the shipping trust told Reuters yesterday.
'We took delivery of a few ships in the early part of Q2, which we didn't have in Q1, so that should affect the numbers accordingly,' Thomas Preben Hansen, CEO of Rickmers Trust Management, said in an interview. 'As we add ships to our portfolio, our revenue increases and our distributable cash flow should increase accordingly.'
A triple whammy of weak consumer demand, ship oversupply and the re-stocking of iron ore inventories at Chinese ports in the past 3-4 weeks have kept shipping rates under pressure.
Rickmers expects full contribution in the second quarter from two new ships delivered earlier this year, one leased to Korea's Hanjin Shipping and the other to Japan's Mitsui O S K Lines.
It has seven outstanding committed vessel buys, three vessels leased to Hanjin due later this year, and four vessels leased to A P Moller-Maersk due next year, but the funding for the latter has not been secured.
'We've gone from an environment where there was an abundant amount of bank financing for shipping, to currently going through a period where the appetite for shipping financing has been reduced. But ship financing will return to the market,' he said.
Rickmers and the other two Singapore-listed shipping trusts, Pacific Shipping Trust and First Ship Lease Trust, generally offer higher yields than Singapore-listed real estate investment trusts, because ships typically have a lifespan of 25-30 years.
Rickmers reported a 60 per cent increase in first-quarter distributable income to US$19.6 million, on revenue of US$32.5 million. Its shares have risen 14 per cent so far this year, versus a 29 per cent gain in the broader Singapore index.
Charter rates have likely bottomed, and there might be a gradual upwards correction in container freight rates by the third quarter, a traditional peak season for container shipping, the CEO of the shipping trust told Reuters yesterday.
'We took delivery of a few ships in the early part of Q2, which we didn't have in Q1, so that should affect the numbers accordingly,' Thomas Preben Hansen, CEO of Rickmers Trust Management, said in an interview. 'As we add ships to our portfolio, our revenue increases and our distributable cash flow should increase accordingly.'
A triple whammy of weak consumer demand, ship oversupply and the re-stocking of iron ore inventories at Chinese ports in the past 3-4 weeks have kept shipping rates under pressure.
Rickmers expects full contribution in the second quarter from two new ships delivered earlier this year, one leased to Korea's Hanjin Shipping and the other to Japan's Mitsui O S K Lines.
It has seven outstanding committed vessel buys, three vessels leased to Hanjin due later this year, and four vessels leased to A P Moller-Maersk due next year, but the funding for the latter has not been secured.
'We've gone from an environment where there was an abundant amount of bank financing for shipping, to currently going through a period where the appetite for shipping financing has been reduced. But ship financing will return to the market,' he said.
Rickmers and the other two Singapore-listed shipping trusts, Pacific Shipping Trust and First Ship Lease Trust, generally offer higher yields than Singapore-listed real estate investment trusts, because ships typically have a lifespan of 25-30 years.
Rickmers reported a 60 per cent increase in first-quarter distributable income to US$19.6 million, on revenue of US$32.5 million. Its shares have risen 14 per cent so far this year, versus a 29 per cent gain in the broader Singapore index.