Group Performance Review


US$ MillionNote20182017Change*
Bunker, port disbursement &
    other voyage costs
Time-charter equivalent
   ("TCE") earnings
Owned vessel costs
   Operating expenses2(149.7)(139.3)-7%
   Net finance costs4(32.4)(32.3)_
Charter costs5(451.4)(451.0)_
Operating performance before
Total G&A overheads6(59.8)(54.4)-10%
Taxation and others(1.3)0.3>-100%
Underlying profit72.02.2>+100%
Unrealised derivative
Write-back of onerous
    contract provisions
Distribution from Muchalat
Write-off of loan
    arrangement fees
Impairments and sales of
Office relocation costs-(1.4)
Towage exchange loss-(1.3)
Profit attributable to
Net profit margin5%1%+4%
Return on average
    equity employed


  1. Total time-charter equivalent (“TCE”) earnings increased by 12%, reflecting a continued market recovery.
  2. Total operating expenses of our owned vessels increased by 7% as our owned fleet expanded, but our daily vessel costs remained substantially unchanged at very competitive level as a result of scale benefits and continued cost control.
  3. Depreciation of our owned vessels increased by 6% as our owned fleet expanded, but with slightly reduced daily cost principally due to the addition of lower cost acquisitions.
  4. Net finance costs were substantially unchanged.
  5. Charter costs net of the release of onerous contract provisions were substantially unchanged.
  6. The increase in total G&A overheads was attributable primarily to an increase in staff-related costs as our owned fleet expanded.
  7. An unrealised derivative expense from bunker swap contracts as at the year end was a result of a significant drop in oil and bunker prices.
  8. Due to the improved market outlook, the balance of onerous contracts provisions for future years was fully written-back.
  9. A distribution was received from our associate Muchalat relating to its disposal of assets before liquidation. Our investment in this associate had previously been fully impaired.
  10. Loan arrangement fees were written off upon termination of loans refinanced by a new revolving credit facility.
  11. The impairment relates to the disposal of one of our older Handysize vessels which will be delivered to her new owner in 2019.
  12. EBITDA increased substantially as a result of the stronger freight market in 2018. Our cash and deposits at the year end stood at US$341.8 million (2017: US$244.7 million) with net gearing of 34% (2017: 35%).

EBITDA (earnings before interest, tax, depreciation and amortisation) is gross profit less indirect general and administrative overheads, excluding: depreciation and amortisation; exchange differences; share-based compensation; net unrealised bunker swap contract income and expenses; net unrealised forward freight agreements income and expenses; utilisation and write-back of onerous contract provisions; and Charter Hire Reduction adjustments.

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Group Performance Review

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