Shipping firms review earnings amid anxiety over zero emission

Shipping companies across the world have continued to count their earnings for the half year (H1) 2019, even as they scramble to meet the 2020 deadline for zero emission fuel for vessels.

Substantial number of the firms recorded profits, but a few others had a deficit account owing to shrinking deals.German shipping company, Hapag-Lloyd, concluded H1 2019 with a significantly higher operating result than in the same period last year.The company, in its half-year financial result indicated that earnings before interest and taxes increased to €389 million, up from €91 million reported in H1 2018.

The group’s net result rose to €146 million, against the -€101 million seen a year earlier, while earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed to €956 million from €427 million year-on-year.Chief Executive Officer of Hapag-Lloyd, Rolf Habben Jansen, said: “Thanks to higher transport volumes in our core trades, good cost control and slightly better freight rates; we can look back on a good first half year. This also allowed us to redeem additional debt through the early repayment of a senior note.”

Hong Kong-based, Orient Overseas Container Line (OOCL), delivered stronger volumes and higher revenues during the period, reporting that total volumes increased by 3.2 per cent and total up 6.5 per cent growth over the same in 2018,.

However, the company’s Trans-Atlantic services marked the greatest surge in volumes and revenues. Volumes jumped by 14.9 per cent from 209,172 TEU to 240,294 TEU, while revenues reached $294.8 million, representing an increase of 20.1 per cent.Dubai-based shipping company, Gulf Navigation, reported an increase in H1 2019, while net losses for the same period expanded.

The company delivered a net loss of AED 27.8 million ($7.5 million) in H1 2019 compared to loss of AED 14.8 million ($4 million) in 2018.Revenues however increased to AED 85.7 million ($23.3 million) from AED 71.1 million ($19.3 million) seen in H1 2018, representing a 21 per cent rise year-on-year.

Chairman of the board, Gulf Navigation, Saeed Mubarak Al Hajeri, said: “We continue to work on the turnaround for GNH. The board has approved refinancing of certain liabilities, which we expect to improve the cash flow situation and clear long outstanding issues. Furthermore, we are preparing for the upcoming IMO 2020 regulations with the installation of scrubbers and completion of special survey this year.”

The International Maritime Organisation (IMO), which studies measures to reduce greenhouse gas (GHG) emissions in international shipping set a goal to reduce CO2 emissions by 40 per cent per unit of transport by 2030, and total GHG emissions by 50 per cent by 2050, and to zero GHG emissions as early as possible in this century. The new sulphur regulation becomes effective January 1, 2020.

Against this backdrop, Mitsui O.S.K. Lines, Limited has signed a Memorandum of Understanding (MoU) with Cosco Shipping Energy Transportation Company Limited (CSET), for future Liquefied Natural Gas (LNG) and ethane carrier projects.For over 10 years, MOL and CSET have established a strong and extensive partnership, and jointly participated in various ongoing projects, namely the ExxonMobil DES Project 1, Australia Pacific LNG Project 2, and Yamal LNG Project 3.

At the same time, MOL and CSET are aiming to develop and deepen the partnership through joint participation in new opportunities for upcoming LNG and ethane carrier projects.

Also, a Singapore-based multipurpose shipping company, AAL Shipping, revealed plans to become fully compliant with the new IMO January 1, 2020 sulphur deadline.

“Over the past year, we’ve been researching the options available and decided that migration to the use of low sulphur fuel … will best meet the interests of the customers, trades and industries we service globally,” AAL Shipping said.Fuel with sulphur content of 0.5% or less comprises variants such as low sulphur fuel oil (LSFO), ultra-low sulphur fuel oil (ULSFO) and low sulphur marine gasoil (LS-MGO).