Lower fleet utilisation and reduced charter rates dampened revenue for container ship operator Rickmers Maritime in the first quarter.
Rickmers’ net profit fell by eight percent to US$9.85 million for the three months to March 31, with charter revenue down four percent to $33.9 million, reported Straits Times.
Two of its ships had been repositioned in preparation for their new deployment for a major client, Maersk Line, the world's largest container shipping company.
Another ship was idled due to engine problems, causing fleet utilisation in the first quarter to fall to 94.3 percent.
Vessel operating costs also went up, 13 percent ahead at $9.9 million.
Rickmers said this was mainly due to expenses for the repair of the ship with the engine problem, as well as higher bunker fuel costs needed to reposition the two ships.
The new charters with Maersk for a minimum of 12 months to a maximum of 24 months have commenced, helping Rickmers' fleet to reach a 98 per cent utilisation rate.
The trustee-manager said in a statement that the new charters give it good earnings visibility for the year ahead.
But it warned of troubled waters, with a significant number of new ships scheduled for delivery over the next 12 months.
That would add to the prevailing level of structural oversupply, which the trustee-manager said "is likely to outstrip demand in the near term despite an increase in the scrapping of existing ships".
Thomas Preben Hansen, the chief executive of the trustee-manager, said: "Whilst the charter market remains under pressure (from) the persistent oversupply of container ships in the market, Rickmers Maritime's performance has been consistent due to its existing charter agreements with reputable counter parties."
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