Oslo: Jens Ismar, ceo of Oslo-listed Western Bulk, admitted he had read the markets wrong last year, in a frank letter to investors published today.
“What a disappointment,” conceded Ismar in his opening line, summing up last year’s performance.
“We got the market wrong in 2014,” he said, with too many ships open at the start of 2014 in anticipation of a decent year ahead.
Ismar said the decline in seaborne coal trade was the single most important factor driving the rates down in 2014, predominantly caused by reduced coal imports to China. Another important factor that reduced demand for supramaxes, Ismar said, was Indonesia standing firm on the ban on export of bauxite and nickel ore. There was also less congestion in South America, which added further capacity.
To get back on track Ismar said WB Chartering would look to capture short-term trends in the market while a new office in Miami would target business in the US Gulf area.
“Our main goal is to return to profitability in a challenging market,” Ismar said.
For WB Shipholding, most vessels will continue to be traded on short term employment.
“Our market expectations for 2015 are muted,” Ismar said, admitting the unit would register another loss this year as market rates are expected to stay below its chartered-in costs.
“Looking beyond 2015, we firmly believe we have the right ships at still attractive rates and optionality,” Ismar concluded.