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FreeSeas sticks to short terms

FreeSeas sticks to short terms
Handysize bulker owner FreeSeas intends to stick with its short term chartering policy as it picks up encouraging signals of improvement in the dry bulk market.

FreeSeas sticks to short term chartering policy.

Handysize bulker owner FreeSeas intends to stick with its short term chartering policy as it picks up encouraging signals of improvement in the dry bulk market.

?There is interest in longer term contracts in the market,? chief executive Ion Varouxakis told a conference call to discuss the Nasdaq listed company"s fourth quarter and full-year 2009 results.

?This may mean charterers see the market as likely to improve and generally speaking we still favour spot and short term contracts for the fleet.

?We do not feel we are yet at the point to cover the fleet and the downside is limited for handymaxes,? said Mr Varouxakis.

The FreeSeas boss also saw encouragement in how the market was absorbing newbuildings. Admitting that many investors were ?scared? by the large orderbook for bulkers, he nonetheless noted that the last and present financial quarters were ?peak? for newbuilding deliveries.

?These are quarters where rates have been sustaining themselves,? said Mr Varouxakis. ?The bigger picture is that so far newbuilding deliveries into the market have not affected rates so badly. The rates have been going up.?

The company"s latest deals were a 30-40 day charter at $12,000 per day for the 12-year-old handysize Free Knight and a time charter trip of 60-110 days for the 12-year-old Free Maverick at $15,000 per day.

According to FreeSeas, the two charters represented a combined increase of $4,500 per day on their earnings under their previous charters.

Since the pair were fixed, the market had further strengthened, Mr Varouxakis told analysts.

FreeSeas posted a net loss of $363,000 for the fourth quarter of last year, compared with net income of $5.4m in the same quarter of 2008.

It partly attributed the result to lower charter rates and additional vessel maintenance costs of about $600,000 in the quarter to equip two of its older vessels for further trading.

Net income for the full year was $6.9m compared with net income of $19.2m for 2008.

Mr Varouxakis said a positive contribution to results had been made by the company"s distressed acquisition of a handymax for $11m in the middle of the year.

The company estimated it had already appreciated in value by ?as much as 50%? from the acquisition price.

www.turkishmaritime.com.tr

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