By the end of the first six months of 2013, Royal Arctic Line hopes to have found the shipyard or shipyards which will build the carrier's five new ships completing its investment programme in a new fleet which was originally planned to take place at the now insolvent P&S Werften. At the moment, Royal Arctic Line is negotiating with shipyards in Germany, Lithuania and Poland, CFO Ole Baunbæk informs ShippingWatch.
“Our negotiations with the German shipyard did not lead to anything but we are very active in looking at alternatives and we are in contact with the different shipyards of the region and especially in Poland. We hope to have an agreement in place before the end of June,” he says.
Ole Baunbæk says that, previously, Royal Arctic Line has built a ship at the major Polish shipyard Remontova situated in Gdansk and that the shipyard is also one of the contenders this time around. And there is no doubt that the investment will be significant. The investment programme at P&S Werften which did not come to anything amounted to approximately EUR 100 million and “I do not think it will become cheaper with our new negotiations,” Ole Baunbæk says.
The other day, Royal Arctic Line presented its financial results for 2012 showing a modest profit of USD 1 million after taxes as a result of the bad Greenlandic economy and a drop in freight volumes. A result which is not likely to change much in the next couple of years, the CFO states because of the large investment in a new fleet as well as future investments in a new container terminal in the new Nuuk container port decided on by the Greenland Parliament last year.
May gain on oil activities
However, the carrier eyes some possible bright spots. The activities in the Greenlandic underground may have a major impact on the carrier’s bottom line, Ole Baunbæk assesses. This was seen in 2011 as the carrier presented a historically large profit which was influenced by the many activities connected to oil exploration in Greenland, which dropped much in 2012 affecting to results.
“In the short run, the development and exploration of oil may begin to lead to a significant growth in activity in Greenland. We do not know exactly when they (the oil companies Ed.) will return but some of the major companies have indicated that they might return in 2014 to continue their exploration efforts which means a lot to us,” he says.
In cooperation with the Maersk-owned Danbor, Royal Arctic Line owns the subsidiary company Arctic Base Supply servicing the offshore industry.
“Even though we only receive a small part of the oil companies’ activity it means a lot to our business.”
How much does the activity make up of your overall business portfolio?
“So far, it does not take up a lot of room, but there is no doubt there is a major potential. Today, it only makes up a very small share but it still has an impact on our bottom line. Our company is pretty flexible but we are ready to lift quite a lot and therefore it may mean a lot for our finances,” Ole Baunbæk says.
Royal Arctic Line will have to wait till first quarter for shipyard clarification
Royal Arctic Line says goodbye to P+S Werften
Royal Arctic Line could pay high price for German shipyard collapse
More from ShippingWatch
Schulte Group Chairman reluctant to invest: "There is simply too much uncertainty"
Coffers are filled with money ready to be spent on investments, but German Schulte Group holds on to its capital for the time being. ”There is simply too much uncertainty,” says Group Chair Heinrich Schulte.
Harald Fotland takes over at Odfjell: "Goals are set, but there may be some adjustments"
To replace Kristian Mørch, the Odfjell family has chosen a new chief executive who truly knows the chemical tanker carrier from within and aims to ensure continuity. ShippingWatch has interviewed Harald Fotland regarding his plans and priorities for the Norwegian carrier.
Euronav CEO talks about moving address: Bermuda could be on the table
Prominent Belgian tanker carrier Euronav is open to changing address as part of a forthcoming merger with Frontline. ”Everything is being considered at the moment,” says CEO Hugo De Stoop in an interview with ShippingWatch.
Maersk's decommissioning venture closes after few years
Maersk Decom, established by Maersk Supply Service and Maersk Drilling in an attempt to benefit from a large market for decommissioning assets within the oil industry, shuts down. Chief executive left several months ago.
Kuehne + Nagel beats competitors on EBIT results in Q1
Neither DSV nor DHL were able to keep up with Kuehne + Nagel in operating earnings during the year’s first three months. In other important areas, however, both companies outdid their Swiss competitor.
Junior Shipbroker 
Senior Finance Business Partner 
Marine Superintendent 
Port Director for the Port of Kolding 
Marine Sales Executive - Performance Coatings 
Operations Manager 
Team Manager