Thorco Chairman: More Ships and IPO

Posted by Joseph Keefe
Wednesday, June 11, 2014
Thorco Triumph (image: Thorco Shipping)

Thorco sees fleet expanding by 50 pct in coming years. Multi-purpose shipping company aims to list in Copenhagen. Drewry expects industry to pick up in next few years.

Denmark's Thorco Shipping expects to expand its fleet by 50 percent in coming years and plans to list on the Copenhagen stock exchange when industry conditions improve, its chairman said.

"It is the plan to list Thorco Shipping's shares in Copenhagen one day but the shipping market needs to be in better condition," Chairman Thor Stadil told Reuters by telephone on Wednesday.

Thorco Shipping, established 11 years ago and controlled by the Stadil family, is the world's second-biggest transporter of goods bigger than container size such as wind turbines, industrial components for oil rigs and trains. It has a fleet of 105 vessels while Germany's BBC Chartering the biggest company in the sector, has 150 vessels.

The global shipping industry has struggled since the global financial crisis in 2008 with low freight rates as a result of overcapacity in nearly all sectors of the industry. Analysts see demand for multi-purpose shipping picking up in the next few years but industry players say consolidation is needed.

Stadil said Thorco's fleet expansion plan would see it take over vessels that banks want to offload from shipping companies in financial difficulty.

"Many banks are suffering from loans to the shipping industry and they want to get rid of vessels they ... have taken over from clients that have failed," he said.

China's COSCO and Wagenborg of the Netherlands are other players in the multi-purpose, heavy-lifting sector of the industry.

Before the global financial crisis, Thorco was booking earnings of more than $20,000 per day for each ship, Stadil said. Daily freight rates for multi-purpose vessels are currently $9,000-$10,000, and Stadil said $15,000 per day was a normal level.

"Many new ships were ordered in the years ahead of the financial crisis. No one is currently ordering new ships and old ships will leave the market. It will in coming years help to create a better balance between demand and supply," Stadil said.

Thorco took over a fleet of around 40 vessels from Danish shipping company Clipper in September 2013. Small Danish player Combi Lift and BBC Chartering recently announced they would pool some of their vessels to try and boost both companies' earnings.

"A consolidation of the industry is needed," Combi Lift's chief executive, Anders Poulsen, told Reuters by telephone.

Last year was a tough one for the industry but Drewry Research forecasts demand for multi-purpose shipping will grow at an average annual rate of 5 percent over the coming years.

"However, we are only expecting modest growth in 2014 as competition from other shipping sectors will continue to eat away at market share. But we expect the sector's market share to recover through 2015/16," Drewry said in a research note.


By Ole Mikkelsen

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