Oslo: There is something refreshingly humble and frank about Jens Ismar, the CEO of Western Bulk, a characteristic rather uncommon in the world of shipowning. Take, for instance, his most recent annual report, in which he admitted: “We got the market wrong.” Said wrong assumptions resulted in a $57m loss last year, something Ismar is desperate not to repeat, though he has already gone on record to warn 2015 will likely be another year in the red.
The Oslo-listed dry bulk player is one of the top operators of supramax-sized vessels in the world and is the subject of our regular Friday shipowner profile.
Ismar acknowledges the grim dry bulk market at present and admits the bad times might last for quite a while yet with plenty of pain to come.
“We are definitely at a low point in the cycle,” he says, musing: “The question is more how much longer we will be at this historical low level? This time, contrary to what happened during the financial crisis, it seems we will not get any help from the demand side. The industry therefore has to take the long road to rebalance the markets by scrapping and cancelling tonnage. This is always a painful journey.”
As previous head of shipbroker, Lorentzen & Stemoco, as well as a former director of chartering and operation with BW Gas, he is remaining conservative in fleet growth plans.
“We are an asset light company and will not invest in assets the way we are structured today. This being said asset values are on the way down so it is still too early as of today to invest in tonnage,”Ismar elaborates.
The Oslo outfit is using the current downturn to strengthen areas where it has the most experience. “The key before the market turns — which is likely to take some time — is to sharpen the organisation and to fight for every dollar to try to make some margin,” he says, adding: “We will focus on the sizes where we have real strength and scale – handies to ultramaxes. In these segments we have proven we can create value.”
As a part of the ongoing ‘sharpening’ process, the company recently closed one desk shortly after opening another office.
“The closure of the panamax desk,” Ismar explains, “was due to the fact we were unable to create synergies and leverage with the other Western Bulk units. The remaining business units work well together and leverage on each other’s strengths.”
To stay on track WB Chartering is looking to capture short-term trends in the market with a new office in Miami targeting business in the US Gulf area.
“Looking beyond 2015, we firmly believe we have the right ships at still attractive rates and optionality,” Ismar concludes.
Anyone else curious as to how a CEO can take a huge bonus in a year that his company loses 60m? If WB ever turn a profit the bonus will be so huge they will have to sell another bond to raise the money for his bonus