Excel Maritime Improves TC Contract - Analyst Blog
Excel Maritime Carriers Ltd. ( EXM ), a leading worldwide seaborne transporter for dry bulk cargoes, recently improved and consolidated the time charter contracts for its fleet. The company announced that it has entered into four new time charter agreements, all of which are for Kamsarmax vessels. M/V Iron Kalypso has been fixed for a period of 10 - 13 months at a gross daily rate of $11,500. The other three vessels, viz., M/V Ore Hansa, M/V Coal Gypsy, and M/V Iron Brooke have been fixed for a period of 10 - 13 months at a gross daily rate of $11,250.
With these four new time charter agreements, Excel Maritime now secures under time charter employment of 53% of its operating days for 2012 for all the vessels in its fleet at an average TCE rate of $16,114. Importantly, 90% of Excel Maritime's capesize vessels are also under period charter agreement for 2012 at an average TCE rate of $28,195. Reduction of large spot exposure will undoubtedly facilitate the company to consolidate its financial results going forward.
The drybulk shipping sector is facing serious challenges since the spot vessel rates collapsed significantly. We believe the sole reason for this dismal condition is the sheer increase of newbuild ships under operation that resulted in intense price competition. The spot rates of drybulk vessels have fallen to such a low level that even surging commodity prices in the Asian markets failed to offset the loss of the vessel owners.
Excel Maritime operates under highly competitive drybulk shipping industry. The company's main competitors are Diana Shipping Inc. ( DSX ), Genco Shipping & Trading Ltd. ( GNK ), and DryShips Inc. ( DRYS ).The company took a severe hit on its time charter equivalent rate in the last quarter.In the third quarter of 2011, the realized average daily time charter equivalent rate of Excel Maritime came in at $16,864, a stiff reduction of nearly 26.2% year over year.
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