Tuesday, 2 July 2013

MISC wants to trim its tanker fleet by around 10% to help it ride out the ongoing crisis

MISC wants to trim its tanker fleet by around 10% to help it ride out the ongoing crisis facing the tanker markets. Datuk Nasarudin Md Idris, chief executive of MISC, believes a recovery in the tanker sector is likely at some point next year. To meet the market challenges, MISC wants to sell some of its older tankers and fix an increasing number of others on period charters.

  • MISC has been working hard in recent years to counter the effects of the poor shipping markets. The most notable step it took was ditching its loss making liner arm. Other non core assets have also been disposed of in an exercise that Nasarudin describes as a rebalancing of the company's portfolio. "Going forward, our agenda is one of consolidation and cost optimisation," he explained. 
  • Yee Yang Chien, MISC VP of corporate planning and development, says the company is looking to reduce the fleet by around 10%. Its tanker portfolio currently stands at 79 vessels including 10 VLCCs, 37 aframaxes, four suezmaxes, two dynamic positioning (DP) shuttle tankers and 18 chemical tankers. Yee cautions that MISC is not looking to release tonnage at fire-sale prices despite the desire to trim its fleet. 
  • MISC has already been slimming its tanker fleet. This year alone, it has sold off four VLCCs and several aframaxes. These are likely to be the categories of ships the company will be looking to scale down going forward. It still has on order for four VLCCs at DSME in South Korea and two 120,000-dwt shuttle tankers set for delivery in 2014 and 2015 from Samsung Heavy Industries (SHI), also in Korea. The two latter newbuildings are fixed on 15 year term charters to Statoil of Norway.
  • On the conventional tanker side, MISC has also been looking to reduce its spot exposure by fixing an increasingly larger portion of its fleet on period charters. A full 55% to 60% of the fleet is now working on term contracts, although the exact percentage varies according to market conditions. (Tradewinds)

Source: CIMB Daybreak - 02 July 2013

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