Western Bulk records net profit of USD 9.0 million

Hans Aasnæs, CEO of Western Bulk

Western Bulk Chartering AS has achieved a net profit of USD 9.0 million in the first half of 2021, a significant improvement from a loss of USD -2.9 million in the same period of 2020.

According to a statement by the Western Bulk, the Group is benefitting from a considerable market recovery combined with increasing returns on investments in operational improvement and data driven decision making. Based on current market levels, the second half of 2021 is likely to see further strengthening of results with net profit after tax for the full year of 2021 expected to reach between USD 40 and 50 million. This is a due an extraordinary strong market and favorable positions taken early this year.

The improved results are a testimony to the many deliberate strategic and operational initiatives Western Bulk has implemented in recent years to regain the historical profitability of its asset light business model. Key initiatives include investments to allow for more data driven decision making, and a more systematic approach to business development and client relationship management. In addition, the Company has made organizational changes to strengthen cooperation between regions to improve decision making, as well as to capture a larger arbitrage potential from higher dry bulk market volatility. In addition, the number of vessels was taken down from 160 to about 110 vessels to consolidate the business and improve quality throughout the organization, and to allow for the number of vessels to be rebuilt with higher average trading margins. The company is gradually increasing the number of vessels again and is seeing positive impacts from the focus on building relationships with core vessel owners and cargo customers. For the second half of 2021 a substantial portfolio of the optional period for the chartered in tonnage has been established.

Recovery of the world economy combined with historical low order book to fleet ratio and longer yard lead times due to high ordering activity in other shipping sectors could result in a prolonged period with enhanced market volatility which is the foundation for increased profitability for Western Bulk’s asset-light business model. The dry bulk market reached ten-year highs in the first half of 2021 as trade rebounded with longer ton-miles and disruptions lending market support. The Baltic Supramax Index 58’(BSI) increased by 248% compared to the same period of last year to an average of USD 21,014/day. The Pacific Supramax market in particular has been performing exceptionally well since the beginning of the year following the rapid economic recovery in the Far East and surging commodity prices.

“The significant improvement in results proves that we are on the right path with our initiatives to become more data driven and increase cooperation across the company, as well as our focus on a more systematic approach to business development and client relationship management. I am very pleased with what our dedicated employees have achieved, states Hans Aasnæs, CEO of Western Bulk”

The management and Board of Directors are optimistic on the outlook for the dry bulk sector and have initiated the process of seeking a listing on Euronext Growth in the third quarter of 2021. In connection with the listing, the company will consider raising a smaller amount of new equity for working capital purposes to allow for growth and scale on investments made in recent years and benefit from the prevailing strong dry bulk market conditions. The company has retained Arctic Securities AS and DNB Markets, a part of DNB Bank ASA as financial advisors in connection with the listing process. The company is currently registered on Euronext NOTC, a marketplace for unlisted shares

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