Stena Bulk

EXPANSION PLANS AND A GROWING FLEET

Stena Bulk is one of the world’s leading tanker operators, offering safe and cost-effective transportation of crude oil and refined petroleum products by sea. This requires a holistic perspective – from development and construction to crewing and chartering of first-class tankers.

The results for 2014 were significantly better than expected and the strongest since in 2008. The main reason is a positive development for the company’s Suezmax and Aframax class crude oil tankers, although our product tankers also showed a positive trend.

Freight rates for our crude oil tankers rose by over 60% during the year. Stena Weco’s MR market for clean petroleum products had a weak start to the year, but made a strong recovery at the end of the year and Stena Weco reported a profit above expectations. The recovery was largely attributable to new refineries, longer transport distances and falling oil prices.

Both Stena Sonangol Suezmax Pool and Stena Weco ­continue to be prominent in terms of triangulation (efficient logistics system).

Stena Bulk’s three LNG tankers Stena Blue Sky, Stena Clear Sky and Stena Crystal Sky are employed on time charters. Particularly notable was their extremely high utilisation rate and the fact that they were in operation every day during 2014. The high utilisation rate is a result of our safe and efficient operation of the vessels, which places the company in a good position to meet customer expectations. These factors ensure that Stena Bulk’s offering in the LNG segment is still attractive to the market.

Fleet expansion

Stena Bulk’s fleet consists of vessels owned by the company itself and vessels owned with partners. There are also vessels that are chartered for short or long periods and commercially managed vessels. The total fleet comprises about 115 vessels, which is an increase of about 20 vessels since 2013.

Within this expansion, the Stena Weco system has been expanded by an average of ten vessels, which means that it consisted of about 60 ships at the end of 2014. Stena Weco is planning roughly the same fleet increase in 2015, and this will include four of the IMOIIMAX vessels scheduled for delivery to Stena Bulk and its partners in 2015.

Golden Stena Weco is a joint venture between Stena Weco and Indonesia-based Golden Agri-Resources, which produces and trades in vegetable oils. Golden Stena Weco, which carries chemicals as well as vegetable oils, has shown very positive growth in earnings and volumes during the year.

In 2014, Golden Stena Weco took delivery of the five vessels purchased in 2013. In addition, the company has expanded its fleet by contracting a number of vessels on time charters. This brings the total fleet to 15 vessels, compared with the seven to eight vessels the company had available the previous year. Golden Stena Weco’s aim is to continue its growth through freight contracts and favourable logistics.

The size of Stena Sonangol Suezmax Pool has varied between 20 and 25 vessels and had largely the same number of vessels in 2014 as in 2013. Stena Sonangol Suezmax Pool is one of the most energy-efficient pools in the world and has the highest income of all comparable competitors. The aim is to continue the growth so that the pool encompasses 30–35 vessels.

During the year, we sold our 35% ownership share in ­Paradise Tankers, which had comprised co-ownership of three Panamax vessels. In connection with the transaction, we acquired one of the tankers.

In early 2015, we sold Stena Calypso.

The IMOIIMAX tanker Stena Impression was christened in Singapore in early 2015. The ship’s godmother is Jesslyne Widjaja, ­Director, Corporate Strategy & Business Development, Golden Agri-Resources.

Extended operation in Asia

A joint office for Golden Stena Weco’s operations was established in Singapore in 2012. The partnership has developed very positively and Golden Agri-Resources’ promised freight volumes have also materialised. The total increase in freight volumes is 20%. Golden Stena Weco’s expansion has enabled the company to extend its operations, resulting in further recruitment.

Business at Stena Bulk’s Singapore office has also increased as a result of changed trade patterns. Now that the United States has reduced its imports of oil from West Africa and Venezuela, increased volumes are turning to Asia, bringing more business to the Singapore office.

Impact on society

With bunker consumption accounting for 40–80% of shipping costs, a reduction in energy consumption has a major impact on the overall economy. Stena Bulk has succeeded in improving its annual energy efficiency by up to 12% over the last two years. An important reason for this success is the company’s continuous improvements to technical solutions. Other explanations are energy management, optimisation and the individual energy budgets that are produced for each vessel before every trip. Overall, costs have been reduced by MUSD 8 during 2014.

In 2014, a school was opened in Angola as part of a joint initiative of Stena Bulk and Sonangol. The purpose of the initiative is to share the expertise that Stena Bulk possesses and its long-term outcome may be an increase in the local supply of well-trained seafarers. Learn more on Northern Marine Group.

CEO comments

Stena Bulk is measuring up well to its defined goals and the business has delivered significantly better results than expected. For 2015, the goals have been made even higher. We expect to maintain or increase our market share in a growing market. Demand for transportation of crude oil is expected to increase by 2% and for transportation of products and chemicals by 5%. Stena Bulk is well placed to deliver stronger results than in 2014.

Erik Hånell

CEO, Stena Bulk

Next in Annual Review 2014

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