Eagle Bulk reports record full year profit
“Despite a weaker rate environment, our Q4 results cemented a record annual profit of roughly $250 million for 2022,” said Gary Vogel, CEO of Stamford, Conn., headquartered Eagle Bulk Shipping Inc. (NYSE: EGLE) as the company reported its financial results for the three months and year ended December 31, 2022. “These results are reflective of the many actions we have taken over the past years, including our comprehensive vessel sale and purchase strategy encompassing 55 transactions, our segment-leading focus on scrubbers, our differentiated active management approach to trading ships, and our efforts to optimize the balance sheet.”
“As we enter 2023, we remain positive on market fundamentals given a historically low orderbook with a rapidly aging fleet, as well as a number of demand catalysts including China’s reopening post COVID restrictions,” continued Vogel. “While uncertainty in the macro-economic environment has brought volatility, both rates and forward curves have moved up substantially in recent days. Further, with our modern fleet of 55, predominately scrubber-fitted vessels, and a robust balance sheet with investment capacity, the company remains uniquely positioned to deliver value to our stakeholders.”
You can read Eagle Bulk’s full earning release HERE, but its notes on voyage and vessel operating expenses give a useful snapshot of some of the trends confronting shipowners.
For the year, Eagle says that voyage expenses were $163.4 million, compared to $104.6 million for the year ended December 31, 2021. Voyage expenses increased primarily due to an increase in bunker consumption expense of $43.9 million driven by an increase in bunker fuel prices, an increase in port expenses of $11.8 million driven by an increase in fuel surcharges related to tugs along with cost inflation and an increase in costs for contingent liabilities of $3.4 million driven by provisions for certain routine commercial claims.
Vessel operating expenses for the year, which include non-recurring expenses related to vessel acquisitions and sales, were $123.9 million, compared to $103.9 million for the year ended December 31, 2021, with the increase driven, in part, by an increase in ownership days (19,261 for the year ended December 31, 2022 compared to 18,258 for the year ended December 31, 2021).
The increase in vessel operating expenses was due to an increase in crew-related costs of $8.9 million driven by higher crew wages, increased crew changes and increased expenses related to COVID-19 and the conflict between Russia and Ukraine, an increase in repair costs of $5.6 million driven by certain discretionary repairs and upgrades as well as unscheduled necessary repairs and an increase in the cost of lubes, stores and spares of $5.0 million driven by increased volumes and cost inflation.
Average daily vessel operating expenses excluding one-time, non-recurring expenses related to vessel acquisitions and sales and termination charges relating to a change in crewing manager on some of the company’s vessels for the year ended December 31, 2022 was $6,244, compared to $5,357 for the year ended December 31, 2021.
There’s much more in the full Eagle Bulk report and it will be interesting to see what financial analysts make of it all in a conference call set for 8.00 a.m, March 3.