Heidmar Seals Mgo Global Merger Deal

Hellenic shipping news

D’Amico International Shipping Reports 2024 Net Profit Of $188.5 Millionin International Shipping News 14/03/2025 The Board of Directors of d’Amico International Shipping S.A., a leading international marine transportation company operating in the product tanker market, today examined and approved the Company’s draft 2024 full year statutory and consolidated financial results. MANAGEMENT COMMENTARY Carlos Balestra di Mottola, Chief Executive Officer of d’Amico International Shipping commented: “I am proud to report another robust performance for DIS in 2024, with a consolidated net profit of US$188.5 million, closely trailing our record profit of US$ 192.2 million from the previous year. Our daily spot rate improved to US$ 33,871, surpassing 2023’s rate of US$ 32,873, reflecting continued strong demand for our services despite a still robust but less exuberant freight market later in the year. Furthermore, DIS successfully covered 41.5% of its employment days at an average daily TCE rate of US$ 27,420 in 2024, up from 29.8% at US$ 28,107 in the previous year. Consequently, our total blended daily TCE (spot and time- charter) was of US$ 31,195 in 2024, aligned with US$ 31,451 in 2023. In 2024, DIS thrived in a vibrant freight market, driven by limited fleet growth, growing global oil trade, and numerous trade disruptions. Notably, incidents in the Red Sea and Gulf of Aden required us to reroute vessels around the Cape of Good Hope, significantly increasing travel distances. Additionally, the ongoing conflict in Ukraine and related EU sanctions reshaped oil trade flows, reducing Russian oil shipments to the EU while increasing exports to more distant locations such as Asia and South America, prompting Europe to source more oil from the US, the Middle East, and Asia. These changes significantly extended the average distances sailed by our product tankers. Looking ahead, potential resolutions to the conflicts in Ukraine and Gaza could impact market dynamics. A peace agreement in Ukraine might lead to lifting of sanctions against Russia, and a resolution in Gaza could entail a normalization of Suez Canal transits, potentially reducing ton-mile demand for our vessels. However, we anticipate mitigating market factors, such as higher European imports of refined products from the Middle East and Asia if Suez Canal transits resume. Furthermore, a peace agreement in Ukraine might not entail a lifting of sanctions on Russia by Europe and should accelerate the scrapping of an ageing shadow fleet, helping to stabilize the market. Additionally, more stringent measures by the US on Iranian oil exports are likely to generate a replacement of the lost barrels from this country with oil from non- sanctioned countries, benefiting the VLCC market with positive spillovers for the other tanker sectors. Geopolitical dynamics have undoubtedly shaped the freight market recently, yet the industry’s fundamentals remain robust and are poised to continue bolstering our market. Oil demand continues growing at a healthy clip of 0.9 million barrels per day in 2024, with the International Energy Agency (IEA) forecasting a further increase of 1.1 million barrels per day this year. Emerging markets, especially India and Brazil, are set to be significant contributors to this growth. In terms of products, while jet fuel dominated the demand increase last year, both naphtha and jet fuel are projected to be the key drivers in 2025. Refined product volumes also saw an increase, with global refinery throughput rising by 0.5 million barrels per day in 2024 to 82.7 million barrels per day, driven largely by robust refining activities in the United States and new capacity in the Middle East and Africa. According to the IEA, crude throughput is expected to grow by an additional 0.6 million barrels per day in 2025 to 83.3 million barrels per day, supported by stronger non-OECD crude runs, though closures in the Americas and Europe may affect OECD volumes. This continuing trend of expansion in refinery capacity east of Suez should continue supporting ton-mile demand growth for our vessels. On the supply side, newbuild orders for tankers rose significantly over the last two years, with the current orderbook for MRs and LR1s reaching 15.1% of vessels on water (measured in dwt), as at the end of February 2025. While vessel deliveries will accelerate from the second half of this year, they are spread over several years. Furthermore, considering the strong linkages between the different tankers sectors, the orderbook across all tankers (including product and crude carriers), which stands at a lower 13.4% of vessels on water, as at the end of February 2025, might provide a more reliable indicator of the market’s supply fundamentals. Additionally, the fleet is also ageing rapidly, with 17.0% of the MR and LR1 fleet already over 20 years old (17.2% of the entire tanker fleet), and 51.0% over 15 years (41.3% of the entire tanker fleet), as at the same date. This ageing fleet will reduce fleet productivity and eventually lead to an increase in vessel demolitions, with an acceleration anticipated in case of a market downturn or a resolution to the conflict in Ukraine, which would severely limit employment opportunities for such older tonnage. In 2024, with the objective of continuing to control a young and efficient fleet DIS was very active in the sale and purchase market. We began by selling the MT Glenda Melanie, a 2010-built MR and the oldest vessel in our fleet, at an attractive price of US$ 27.4 million. In April 2024, we also ordered four new LR1 vessels from a reputable Chinese shipyard, with deliveries expected in the second half of 2027. These highly efficient, environmentally friendly vessels will considerably strengthen our presence in the LR1 segment, which we anticipate will generate strong returns in the coming years. We also continue investing in new technological solutions and operational measures to make our vessels as efficient as possible. Additionally, also with the objective of rejuvenating our fleet, we exercised purchase options on four top-class vessels built in Japan, which we had been time-chartering-in since their construction. These acquisitions introduced modern and eco-friendly MR vessels into our owned fleet at a cost substantially below their current market value, further lowering our break-even costs. Thanks to our robust financial structure, we could also focus on increasing shareholder returns through both share buybacks and dividends. In addition to an annual gross dividend of US$ 30.0 million distributed in Q2 2024, relating to the Company’s 2023 results, the Company paid an interim gross dividend of US$ 30.1 million in Q4 2024, and repurchased shares totaling US$ 10.3 million throughout the year. Today, DIS’ Board of Directors proposed an annual gross dividend distribution of around US$ 35.0 million to the upcoming Annual Shareholders’ Meeting, which would bring DIS’ total payout, combining gross dividends and share buybacks, to around 40% of the Company’s consolidated net result in 2024. I extend my deepest appreciation to our teams, both at sea and onshore, whose dedication and professionalism underpins our achievements. I am also grateful to our shareholders for their steadfast trust and support. In recent years, we have diligently built a foundation for DIS’ continuing success. Through a modern and efficient fleet, a skilled and cohesive team, and a robust balance sheet, we are well equipped to confront future challenges and seize forthcoming opportunities, generating enduring value for our shareholders.” Federico Rosen, Chief Financial Officer of d’Amico International Shipping commented: ‘‘DIS delivered another strong financial performance in 2024, reporting a net profit of US$ 188.5 million, closely approaching the record net profit of US$ 192.2 million in 2023. Our EBITDA for the year was of US$260.9 million, achieving an EBITDA margin of 70.2% on total net revenue, while our operating cash flow was robust at US$ 258.7 million. Throughout 2024, we further solidified our financial structure, underpinned by strong cash flow generation. By the end of December 2024, our net financial position improved significantly to US$ 121.0 million, with cash and cash equivalents totaling US$ 164.9 million, compared to a net financial position of US$ 224.3 million at the end of 2023. Our financial leverage ratio, excluding IFRS 16 effects and calculated against our fleet’s market value, also saw substantial improvement, finishing the year at 9.7%, a marked reduction from 18.0% at the end of 2023 and 72.9% at the end of 2018. Leveraging our substantial liquidity and superior credit rating, we repaid several high-cost bank loans and secured new financing at more favorable terms, including significantly lower margins. Despite the current uncertain geopolitical landscape, our robust balance sheet has been instrumental in allowing us to continuously deliver value to our shareholders through share buybacks and dividends. In 2024, we distributed a US$ 30.0 million dividend from 2023’s net earnings in the second quarter, followed by an interim gross dividend of US$ 30.1 million in the fourth quarter, and executed share repurchases totaling US$ 10.3 million. Today, we are pleased to announce that our Board of Directors has proposed for approval at the upcoming Annual Shareholders’ Meeting a gross dividend of US$ 0.2940 per issued and outstanding share (US$ 0.2499 net, after deducting the maximum applicable withholding tax of 15%), equivalent to approximately US$ 35.0 million, scheduled for payment in May 2025. We extend our heartfelt thanks to all our stakeholders, for their unwavering support. We remain optimistic about our future prospects and are committed to leveraging our financial strength to consistently generate substantial value and returns for our shareholders.” Source: d’Amico International Shipping

port-and-ship

14 March 2025

Hellenic shipping news

Trump Is Targeting China-Made Containerships In New Flank Of Global Economic War On The Oceansin International Shipping News 13/03/2025 U.S. government pushback against China’s growing dominance in the shipbuilding industry that began under President Joe Biden is being escalated by the Trump administration as part of the president’s widening global economic and trade war, with the world’s largest ocean freight companies facing the threat of fines of up to $1.5 million for Chinese-made container ships that call on U.S. ports. In recent years, China’s presence in the shipbuilding sector has rapidly grown, with China overtaking former leader South Korea in all vessel building sectors. In 2024, Chinese-built container vessels held 81% market share, according to Veson Nautical data. In the bulk carrier fleet, Chinese ships represented 75% of the global fleet. In key energy markets, China has been increasing its presence as well. China now has a 48% market share in the liquified petroleum gas carrier market, edging out South Korea’s 46%. Only in the LNG carrier market did South Korea retain its lead, holding a 62% share versus China’s 38% share. While China has been increasing its shipbuilding for decades, “the dominance of Chinese shipbuilding has been further elevated during the last five years,” said Peter Sand, chief shipping analyst at Xeneta. Attractive financing from Chinese banks and leasing institutions, improved quality of the output, and competitive pricing against the South Korean yards which have dominated the building of advanced and large ships, are all factors, he said. Under Biden, U.S. Trade Representative Katherine Tai initiated an unfair trade investigation of China’s shipbuilding under Section 301 of the 1974 Trade Act. A report released in January 2025 concluded that China’s financial support, barriers for foreign firms, intellectual property theft, procurement policies, and forced technology transfers have given its shipbuilding and maritime industry an unfair advantage. In his speech to Congress last week, Donald Trump announced that he would create a new office of shipbuilding in the White House that would offer special tax incentives to bring more shipbuilding back to the U.S. To penalize ocean carriers using Chinese-made vessels to move trade, the U.S. government has proposed steep levies on Chinese-made ships arriving at U.S. ports. For Chinese-owned operators (such as COSCO), a service fee of up to $1 million could be charged on each vessel. For non-Chinese owned ocean carriers with fleets containing Chinese-built vessels, the service fee would be up to $1.5 million for each U.S. port of call. The massive jump in Chinese ship orders reflects the concerns from the U.S. government. On Tuesday, the House Armed Services Subcommittee on Seapower and Projection Forces is holding a hearing on U.S. shipbuilding, with a public hearing by the USTR scheduled for March 24. In addition to the service fee charged for Chinese-made vessels making port calls, the USTR report from January proposed that ocean carriers with 50% or more of their orders in Chinese shipyards, or vessels expected over the next 24 months, be charged up to $1 million per vessel per entrance to a U.S. port. The fees could be refunded annually in an amount up to $1 million per entry into a U.S. port of a U.S.-built vessel. The proposals to limit China’s shipbuilding dominance would also impose restrictions on U.S. exports, starting at 1% of all U.S. products exported by vessel needing to be exported on U.S.-flagged vessels of U.S. operators. Over the course of seven years, the restrictions will be gradually increased to at least 15% of all U.S. goods needing to be exported on U.S.-flagged vessels of U.S. operators, of which 5% must also be U.S.-built. “It remains to be seen how the international shipping community will deal with the hurricane of ideological hurdles set up by the Trump administration aimed at limiting the footprint and dominance of China,” said Sand. According to VesselBot, 21% of all U.S. trade imported into the U.S. in 2024 arrived on Chinese-built vessels. The global fleets of major ocean carriers are at risk of being subjected to the steep financial penalties. Chinese-made vessels comprise 24% of the global fleet for MSC, the largest ocean carrier in the world, while its new vessel order book shows 92% of its future vessels will be made in China, according to data compiled by Lloyd’s List. If the charges come out in the present form, it’s going to have significant consequences,” Soren Toft, CEO of MSC, told CNBC at the recent TPM Conference in Long Beach, California. Toft, who is chairman of the World Shipping Council, said the proposed charges would reach roughly $20 billion-plus for the industry. That would translate into an additional $600-$800 per container. “So very, very significant,” Toft said. “Either we will have to revise our network and withdraw coverage, or we will have to add that cost on top, and ultimately the consumer will have to pay,” Toft said. To mitigate the costs, the ocean carrier would need to pair down port calls and divert containers to major ports. Toft said one port that could be eliminated, with containers diverted to alternative ports such as Los Angeles and Long Beach, would be the Port of Oakland. “I think a lot of the marginal ports, the peripheral ports will be at risk,” Toft said. “You can add a number of more ships [to move the containers], but if you have no capacity at those ports, you will have choke points. U.S. ports are not very competitive when it comes to the cost of moving things.” These changes would have an impact on port throughput because the truck and rail chassis needed to move the containers will not be at the right ports. In addition to the misallocation of equipment, Toft said this switch in port strategy could create congestion at some ports, which would impact the supply chain. The changes would come in a U.S. ports market that is already operating with widespread issues. “U.S. ports, unfortunately, are not seeing their full potential, because the ports are not operating 24/7. If you look at the realities, probably the U.S. ports are effectively operating 60% of the work week,” Toft said. “So there’s a massive potential here.” MSC is not alone in facing the shipbuilding charges. Maersk, the No. 2 ocean carrier, has a current fleet that is 20% Chinese-made, with 79% of its orderbook from China. CMA CGM’s fleet is 41% Chinese, with 54% Chinese-made vessels on order, while Hapag Lloyd’s global fleet is 21% Chinese-made, with 89% of future orders to be made in China. U.S. shipbuilding has not been competitive Because of China’s dominance in shipbuilding, there has been a bipartisan push on Capitol Hill to incentivize a sluggish U.S. market. Senator Mark Kelly (D-AZ), Senator Todd Young (R-IN), Representative John Garamendi (D-CA-8), and Representative Trent Kelly (R-MS-1) introduced the Shipbuilding and Harbor Infrastructure for Prosperity and Security (SHIPS) for America Act, to close the gap with international builders through a series of programs. Kelly told CNBC that China operates 5,500 ocean-going vessels worldwide while the U.S. has under 100 vessels. To provide cushion for the buildout of new vessel infrastructure, Kelly said that over the course of ten years, the U.S. would reflag 250 vessels to U.S. flags. This reflagging would mean the ship is crewed by American captains, insured by the U.S., and adheres to U.S. maritime safety standards. According to the Hudson Institute, approximately 70% of Chinese-owned vessels are registered in China. Among the rest of the top ten vessel-owning countries, only 27% of fleets are traversing the water under their national flag vessels. A little over 43% of the U.S. fleet is flagged by the U.S. Another lever to encourage U.S. shipbuilding would be tax credits. According to Kelly, China’s subsidies and state financing in the shipbuilding sector average around $15 billion a year. Subsidies in the country’s steel industry also help keep costs down. Around 60% of the cost of the construction of a container ship is steel. “The loss of U.S. shipbuilding and shipping has resulted in the reduction in the number of shipyards for not just commercial ships but also warships and military sealift ships for the U.S. Navy,” said Kelly, who served in the Navy for 25 years. “The U.S. military aircraft carrier capacity lacks 90-100 ocean-going tankers to fuel warships in a wartime emergency. This is a matter of national security.” Arnav Rao, transportation policy analyst at the Open Markets Institute and former staffer for Senator Jack Reed (D-Rhode Island), blasted the Biden Administration for rejecting the Nippon Steel bid for U.S. Steel on national security grounds saying, “The result is the United States robbed itself of the ability to modernize steel-making that could have also supported new U.S. shipbuilding — in support of U.S. national security.” In February, President Trump said he would only support a “minority stake” for the Japanese company. Sand tells CNBC that the price tag of a Chinese-made vessel is estimated to be around $295 million, depending on the size and type of vessel. A U.S.-made vessel can be approximately two to four times more expensive. Meanwhile, back orders of U.S. naval ships could result in wait times of many years for new container vessels. The future of the U.S. cargo vessel market The U.S. maritime fleet is divided into three segments: the domestic fleet (known as the Jones Act fleet), the international fleet, and the Military Sealift Command (MSC). According to the U.S. Department of Transportation, the total U.S. flag merchant fleet is 185. UNCTAD data shows that 80 merchant vessels currently fly under the U.S. flag for international commerce. Ships and barges that carry cargo and passengers between U.S. ports, and U.S. island territories, are part of the domestic fleet. These vessels must be made and operated in the U.S., a requirement in the Jones Act that was enacted in 1920. The U.S.-flag international fleet consists of vessels that carry passengers or cargo between the U.S. and foreign countries. These vessels do not need to be built in the U.S., but they must be owned and crewed by U.S. citizens. The MSC fleet is a part of the Department of Defense, primarily used to resupply Navy combatant ships at sea, and including oil tankers and containerships. The leading U.S. commercial shipyard constructing vessels for operation in the domestic Jones Act trade lanes is the Philly Shipyard in Pennsylvania, which supplies around 50% of the largest U.S. commercial vessels, including tankers and container ships. The shipyard also constructs training vessels for the U.S. Maritime Administration (MARAD). Philly Shipyard was acquired in June 2024 by South Korea’s Hanwha Systems and Hanwha Ocean. Kelly, who recently visited the shipyard, said it is a matter of national security for LNG and tanker vessels to be made in the U.S. and transport U.S. energy. David Kim, CEO of the Hanwha Philly Shipyard, said the Ships for America Act will strengthen the country’s maritime industrial base while making American-built ships competitive in the global shipping industry. “We are working to expand the capacity of our shipyard and welcome initiatives such as the Ships for America Act to boost the industry,” said Kim. In 2022, Matson Navigation Company, a leading U.S. Jones Act carrier in the Pacific, signed with Philly Shipyard to build three new 3,600 TEU (twenty-foot equivalent unit) Aloha Class containerships for an aggregate price of approximately $1 billion (or $330 million each). Chinese vessels of the same size are estimated to cost $60 million. The cutting of steel plates for the vessels began in September 2024, with the first vessel in this contract expected to be delivered in the fourth quarter of 2026, and subsequent deliveries in 2027. Four newly built Jones Act containerships were built for Matson between 2003 and 2006. Not only are U.S. vessels more expensive to make, but operating a U.S. vessel costs around twice as much as South Korean or Chinese vessels with a crew from the Philippines, with costs ranging from $5,000 per day for a smaller vessel to $10,000 per day for a largest vessel. Main operational costs include manning, insurance, stores & spares, lubricants, repairs & maintenance and dry docking, and management & administration. Sand said the biggest expense is salaries of the crew. “Keeping operational costs as low as possible is key to the profitability of carriers when the markets are low,” he added. Operational costs do not include fuel, finance cost, canal fees, or terminal handling charges. In addition to Philadelphia, Kelly said there are existing shipyards with potential for shipbuilding in Mississippi, Alabama, Louisiana and Texas that could be scaled up using incentives in the SHIPS for America Act. The bill itself is agnostic about where or how to build specific infrastructure. “The SHIPS Act would reduce the cost of constructing a U.S.-built cargo vessel capable of serving in international commerce by offering tax credits, grants and other incentives to make capital investment comparable with the cost of investments in allied countries,” Kelly said. “We are not trying to out-build China. We are looking to close that gap.” Source: CNBC

port-and-ship

13 March 2025

Heidmar Seals Mgo Global Merger Deal

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