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Nordic Shipholding Reports 25% Increase in Time Charter Revenues

Nordic Shipholding Reports 25% Increase in Time Charter Revenues
Nordic Shipholding started 2018 on a positive note as the average daily Time Charter Equivalent (“TCE”) rate in January 2018 and February 2018 for the 6 vessels was approximately 25% higher than the average TCE rate in Q4 2017.

However, the TCEs earned in March 2018 fell short of expectations and were generally below the average TCEs earned in the previous 2 months. As a result, the average TCEs earned by the 6 vessels in Q1 2018 came in below the forecasted rates.

Compared to the same quarter last year, the softer tanker market led to a decline in TCE revenue to USD 5.9 million (USD 6.8 million) in Q1 2018. Further, the TCE revenue from the LR1 vessel deployed in Straits Tankers Pool in Q1 2018 was lower than the TCE revenue derived from the 3-year time charter locked in for the LR1 vessel in Q1 2017.

For the 3 months ended 31 March 2018, the Group incurred a loss after tax of USD 0.9 million (loss of USD 0.2 million). The lower tanker TCE revenue from the vessels deployed in the pools and the change in deployment for the LR1 vessel contributed to the higher losses in Q1 2018.

Expenses relating to the operation of vessels in Q1 2018 decreased to USD 3.7 million (USD 4.0 million) as there were certain minor ad-hoc repairs done in Q1 2017. EBITDA fell to USD 1.7 million (USD 2.3 million) due to the reduction in TCE revenue in Q1 2018.

The Group did not make any impairment nor reversal of impairment during the quarter. The development in rates are being monitored during Q2 2018. After accounting for depreciation, interest expenses and other finance expenses, the loss after tax in Q1 2018 was USD 0.9 million (loss after tax of USD 0.2 million).

For the rest of 2018, the 5 handysize vessels are expected to remain commercially deployed in the UPT Handy Pool and Hafnia Handy Pool respectively. The LR1 vessel will continue to be deployed in the Straits Tankers Pool.

The TCE generated in the first two months of the year tracked generally the forecasts provided by the respective pool managers. However, the market deteriorated during March 2018. Consequently, the commercial managers for the respective pools revised downwards their forecasts for the remainder of 2018.

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