The company recorded a full year profit after tax of US$4.2 million, despite significant losses in one business unit.
After good performance for the first half of the year, the second half did not meet expectations, mainly due to the Chile business unit experiencing a Net TC loss of US$10 million in the last six months of the year, combined with low market volatility in the third quarter hampering performance across the group.
In Chile it was revealed that contracts had been approved based on unrealistic assumptions presented by a trusted employee, combined with the market moving against the positions, as well as weather delays. The Chile business unit has been restructured and the employee removed from his position, and internal control routines have been reviewed and enhanced. As the majority of the loss-making contracts in Chile terminate in 1Q19, and the restructuring of the business unit has made it more focused on short term contracts in line with other business units, a zero Net TC result is expected from Chile in 2019.
Activity increased throughout the period from 130 ships in December 2017 to 164 ships in December 2018, with an average of 151 ships in the year. Following an increased activity level combined with oil price fluctuations, more cash was tied up in working capital. This led to a decrease in available cash of US$26.9 million throughout the year, with total available liquidity (incl. free cash and undrawn credit lines but excluding restricted cash) ending at US$29.0 million.
Performance is expected to improve in 2019 following restructuring of the Chile business unit combined with the underlying strong performance from the remaining business units which is expected to continue in 2019.
“After ending both 2017 and the first half of 2018 with increase in profitability, the last six months of 2018 was disappointing due to losses in Chile. At the same time, with the Chile business unit restructured and a good fourth quarter I am convinced that we will be able to better reflect the strong performance in the remaining business units on Group level in 2019," stated Jens Ismar, CEO of Western Bulk.
Read the article online at: https://www.drybulkmagazine.com/shipping/28012019/western-bulk-publishes-second-half-and-preliminary-results-for-2018/