Economic Recovery A Sham.......Another bellwether that shreds the notion of any economic recovery and makes a sham out of the recent stock market rally! Canadian banks stocks are looking very frothy! All the best, The Bluenote
Shipping Market Worst Since World War II, Fisher Says
By Alaric Nightingale
March 16 (Bloomberg) -- The world shipping market is mired in its biggest slump since World War II, said James Fisher & Sons Plc, a U.K. hauler of oil products.
“This is the worst shipping recession since the war,” Chairman Tim Harris said today in a telephone interview. He spoke after the Barrow-in-Furness, England-based company reported little-changed annual profit. Prospects for a rebound at its shipping unit hinge on the timing of any increase in industrial output in northwest Europe, Harris said.
Demand to haul cargoes has plunged because of the global recession, sending charter rates lower and spurring carriers to take vessels out of service. BW Gas Ltd., the world’s biggest shipper of liquefied petroleum gas, said last week it idled four tankers because rates plunged so low that each vessel was losing the company about $25,000 a day.
“There’s been an unparalleled collapse in demand,” said Harris, who was previously chairman of Clarkson Plc, the world’s largest shipbroker. Fisher has a fleet of tankers that haul oil products around U.K. waters.
Fisher slid 17 pence, or 4 percent, to close at 403 pence in London trading. The shares have declined 9.4 percent this year, cutting the company’s market value to 201.2 million pounds ($305 million).
Spot Rates
Net income for 2009 was 18.4 million pounds, or 37 pence a share, compared with 18.3 million pounds, or 36.7 pence, a year earlier, Fisher said in a statement. Its shipping unit, which accounted for 28 percent of sales, lost 1.6 million pounds. Revenue climbed 6.8 percent to 249.6 million pounds.
Weaker cargo-shipping demand from U.K. oil companies forced Fisher to put more of its fleet to work in the single-voyage, or spot, market, where rates slid as much as 40 percent, the statement shows. The portion of its ships on spot charters rose about 10 percentage points to 30 percent.
Fisher will seek to ensure that 80 percent of its fleet is earning fixed daily income that doesn’t vary with movements in the spot market, said Harris. That compares with 70 percent now.
The company also has units that provide services for the defense industry and equipment to the shipping industry such as fenders that protect vessels when docking. Fisher raised its second-half dividend to 8.8 pence a share, increasing the full- year payout to 13.6 pence.
Torm A/S, Europe’s biggest oil-products shipper, said March 11 it probably will report another loss this year after the recession hurt trade.