Impairment chargers related to Odfjell’s LPG carrier newbuildings have led the Oslo-listed owner to consider selling off four 17,000-cbm vessels it has on order.
The Norwegian group posted a $2.75m impairment charge in its Q1 2016 financial results, caused by delays to construction of the eight LPG/ethylene carriers it has on order at Nantong Sinopacific, China.
Four of the vessels are 17,000 cbm in cargo capacity, all due to arrive this year. Four 22,000-cbm gas carriers were originally slated for delivery this year but have been delayed until 2017.
If Odfjell decides to go ahead with the terminations, the first vessel would be cancelled this month and delivery of the three remaining vessels would be cancelled every three months thereafter.
All installments paid on the newbuildings have been secured by refund guarantees from “reputable financing institutions”, Odfjell said.
The first 22,000-cbm gas carrier’s contractual delivery was scheduled for September, but delays have pushed back delivery until April 2017.
Odfjell said that activity in LPG shipping markets has been “flat” over the past quarter, with active export markets to Asia from both the US and Europe during the first months of the year. Trading is expected to ramp up again after inventory building in the US has been completed, now winter is over in the northern hemisphere.