Cancelled Newbuildings Widen Pioneer Marine’s Loss

- May 21, 2016-

Oslo-listed shipowner and dry bulk transporter Pioneer Marine reported a net loss of USD 13.9 million for the first quarter of 2016, mainly attributed to the charges of USD 8.7 million which resulted from the termination of five newbuilding contracts.

Pioneer Marine’s commitments on its newbuilding program amount to USD 30.1 million which will be funded from committed loan facilities available on delivery of the newbuildings and from existing cash and cash equivalents.

The company’s Time Charter Equivalent (TCE) revenue amounted to USD 4.9 million in the quarter, against the USD 6.3 million seen in the same period in 2015, as the TCE per day dropped to USD 3,654 from USD 5,488 recorded in the first quarter a year earlier.

In March 2016, Pioneer Marine cancelled newbuilding contracts for five Green Dolphin 38,400 dwt Handysize bulkers following a mutual agreement with Chinese Yangzhou Guoyu Shipyard.

The company earlier said that the decision was made due to an “unprecedented downturn in drybulk freight rates.”

This cancellation not only eliminated future capital expenditure but also saw the return of all of our instalments that were paid. We now have two newbuildings remaining on the orderbook that are delayed beyond their scheduled delivery dates and we are considering options on those,” Pioneer Marine’s CEO, Pankaj Khanna, said.

Within the second quarter of the year, the company received an amount of USD 44.4 million representing all instalments paid for the construction of the eight cancelled newbuildings and the interest as per newbuilding contract termination agreement.

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