Concordia Maritime ab (publ)

CONTINUING FOCUS ON VESSEL OPTIMISATION

Concordia Maritime is an international tanker shipping company focused on cost-effective freight and safe transportation of refined petroleum products and vegetable oils. The company’s B shares were admitted to trading on Nasdaq Stockholm in 1984. For Concordia Maritime, 2014 was very much concerned with implementation of the company’s new employment strategy.

In terms of length and draft, P-MAX vessels are comparable with a standard MR tanker. The unique design of the hull enables the vessels to carry up to 30% more cargo.

The backbone of Concordia Maritime’s fleet is the ten P-MAX tankers. The tankers combine transport economy and flexi­bility with safety of the highest class. Eight of the tankers are ice class 1B and two are ice class 1A. Three are IMO III classified, which means they can also carry vegetable oils and lighter chemicals.

The newbuilding programme consists of the two 50,000 dwt product and chemical tankers Stena Image and Stena Important, which were ordered in 2012 and are scheduled for ­delivery during 2015. The vessels will be among the most sophisticated on the market. Stena Image and Stena Important will be employed within the Stena Weco system.

As a complement to the product tanker segment, Concordia Maritime is also active in the transportation of crude oil. The presence in the suezmax segment is represented by the tanker Stena Supreme and two 50% chartered vessels (158,000 dwt each).

Events during the year

Significant events during the year included the sale of the ­panamax vessels (LR1), Stena Poseidon and Palva, which were owned in a 50-50 joint venture with Neste Oil. The gain on the sale was realised in the second quarter and contributed strongly to the year’s positive result.

For Concordia Maritime, 2014 was otherwise largely concerned with positioning and arranging the fleet in line with the company’s new employment strategy. The overall aim has been – and still is – to optimise vessel utilisation, thereby creating the best possible conditions for good profitability. A fundamental aspect of this process has involved concentrating employment on trades and cargo systems where the P-MAX vessels’ unique properties come into their own.

The work has been partly successful and has resulted in half of the company’s lighter products vessels being employed on different niche trades during the year. Stena Paris, for example, sailed on one of Total’s niche trades from Southeast Asia to Polynesia, where her extremely shallow draft was of particular benefit. Stena Provence and Stena Polaris were contracted by ExxonMobil for six months of the year for consecutive transportation of refined petroleum products in the Asia Pacific region. P-MAX tankers were also able to successfully take advantage of the increased demand for transportation of light products between Europe and West Africa in the fourth quarter. Here too, the utilisation rate was high in terms of the vessels’ load capacity.

At the end of the year, Concordia Maritime and Stena Bulk established a pool for four P-MAX tankers that will transport heavy petroleum products, primarily in the Atlantic market. The pool enables the company to optimise incentives for ­efficient vessel utilisation. Two of the vessels in the pool were chartered out to Stena Bulk on one-year contracts at the end of the year.

At the end of 2014 and in early 2015, two positions were taken in Stena Bulk’s suezmax fleet corresponding to 50% charters of two tankers. The increased exposure to the crude oil segment reflects continuing confidence in the segment, which made a strong start to 2015.

Signs of a positive market

There has also been a strong start to 2015 for product tankers and, looking at the market as a whole, several factors indicate that the positive trend will continue. In particular, the changes taking place in the refinery area, with a shift from European predominance to the Middle East and Asia, is resulting in increased transport distances.

At the same time, a large number of vessels will be delivered in the coming year. However, our overall assessment is that the market will, despite this, continue to develop in a ­positive direction during 2015 and 2016.

1) Of whom 404 seagoing and 6 shore-based
To obtain more information and a copy of Concordia Maritime’s annual report please visit: www.concordiamaritime.com

CEO comments

Our focus in 2015 will be on continued positioning and employment of the fleet based on our strategy and given market conditions. Our overall assessment is that the market will continue to develop in a positive direction during 2015 and 2016. We shall also be taking delivery of the two new IMOIIMAX vessels during the year. We have high hopes that their high load flexibility and energy efficiency will help us deliver good profitability – thereby creating scope for continuing growth.

Kim ullman

CEO, Concordia Maritime

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