Serious technical problems with cranes aboard ESL Shipping’s new LNG-fueled bulkers have been mainly fixed, according to the company’s parent, Aspo Group.
Aki Ojanen, CEO of Aspo Group, said that the new ships “were disappointments” as their cranes remained inoperable throughout the first quarter, and they were unable to operate as planned.
At the end of the period, crane manufacturer Cargotec MacGregor informed that it had mainly returned the cranes operational.
The installation and testing of the autonomous crane system were postponed to the second quarter of the year due to warranty repairs.
The extensive and serious problems in the conventional mechanics of all the cranes aboard the ships have affected the company’s profitability in the first quarter of 2019. The issues resulted in significant loss of income and additional costs for the shipping company as ESL Shipping had to identify other transportation options with a lower profitability during the repairs.
ESL Shipping however ended the quarter with an increase in its operating profit, driven by higher transportation volumes and the earnings of the acquired Swedish shipping company AtoB@C.
Operating profit for the quarter was up at EUR 3.2 million, compared to 2.6 million reported in the same period in 2018. The operating profit rate for the period was 7.3%, which is low considering the long-term target, the company explained.
Net sales increased by 113% from the comparative period and stood at EUR 43.7 million, up from EUR 20.5 million, as a result of the vessel capacity brought by the AtoB@C acquisition, the deployment of the two new LNG-fueled vessels and higher transportation volumes.
The cargo volume carried by ESL Shipping during the first quarter amounted to 3.6 million tons, rising from 2.5 million tons handled a year earlier.
Looking forward, ESL Shipping expects the financial performance of the new LNG-fueled vessels to reach the targeted level starting from the second quarter.
Uncertainties associated with the development of the cargo markets are expected to have the most significant impact on the performance of the shipping company’s largest Supramax vessels in 2019.
Most of the use of the shipping company’s transportation capacity has been secured in the Baltic Sea and Northern Europe through long-term agreements. The current forecasts of general transportation volumes of contractual partners are satisfactory in the key customer segments, even though there are uncertainties in demand due to the political situation and increased economic uncertainty.