Uni-Tankers has gone through a significant growth during the last year and a half. But the shipping company wants to grow its fleet even more in order to match the other major players in the market.

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"We've agreed with our owner and board that the company will be geared for future growth during the next year or so. But if the market begins to turn, ship prices will hopefully start to increase as well, and that's when we have to be ready to strike. So our ambition is to be on the market looking for new ships that fit with our portfolio. if we want to be able to compare ourselves with some of the other major players in the market, we'll probably need to own four or five more ships within the foreseeable future," says Uni-Tankers CEO Torben Andersen to ShippingWatch.

In that regard, it's good to be part of a solid Group such as United Shipping & Trading Company, he says. USTC presented its financial report for the Group along with those of the subsidiaries on Tuesday, which showed a decrease in revenue.

USTC saw revenues decline in tough market

"I've been given a green light from Torben Østergaard-Nielsen (owner of USTC) to purchase more ships. These days, this requires that we finance a bigger part of it ourselves, but also a good, solid reputation with the banks. The degree of financing for ships varies a lot these days, but one generally has to be willing to put up some the capital oneself."

Not pretty

Uni-Tankers just published its annual report for 2012/2013, which contains a significantly lower result than last year, even though the company's revenues increased. But that's to be expected when one's in the midst transforming a company's business completely while the market is in the doldrums, says Torben Andersen.

"It's not a pretty financial statement, but on the other hand, it's not an unexpected financial statement. We've been through a very interesting period, where Uni-Tankers just a year ago was a very small player in the intermediate segment. We had five ships and nine employees, while our chartering was handled by Maersk. Then we acquired Erria and have since then purchased several ships. At the same time, we've expanded our own chartering considerably in Uni-Chartering, including offices in Turkey, France, and the United States, which means that we're a completely different business now," says Torben Andersen.

Significant growth

Uni-Tankers currently owns a little over 40 ships in the small and intermediate segments for sailing oil and chemicals . Additionally, the number of employees at the company's headquarters has surpassed 50, while the many new ships means the company has taken charge of almost 500 mariners.  The Erria fleet has been successfully implemented and Torben Andersen expects to be able to complete the implementation process by September 1st. In other words, the last year and a half has been hectic for Uni-Tankers, and that's reflected in the company's finances.

Erria acquires Maersk activities in Vietnam

The shipping company's many new ships were purchased at market prices, which have since then declined. This has forced Uni-Tankers to perform a USD 32.8 million impairment on its fleet:

"We want a sound business, that's why we've performed major impairments. We want our assets to be as close to market values as possible. We've also spent a lot of time and money during the past year on upgrading the ships we've purchased. Erria were having financial difficulties for some years before we acquired the company, and that shows on the ships. So we've docked ten ships this fiscal year, and that's not something you do for free," says Torben Andersen.

This is of course reflected in Uni-Tankers' finances. The shipping company had a net revenue of USD 143.6 million for the year, versus USD 65.6 million the year before, while the result before taxes was a USD 37.5 million deficit for the fiscal year 2012/2013, compared to a deficit of USD 7.8 million the previous year.

"We've worked very hard in the past year, and we've actually done a pretty solid job. The only thing missing is the results, but it could have been a lot worse. This is primarily caused by the rate level of the market, and we're very aware of our cost level, as we're continuously working to minimize the company's expenses, energy optimization on fuel consumption, and other things that can help improve our bottom line," says Torben Andersen.

Improvement in sight

In spite of the challenges of the market, Torben Andersen believes the market will improve within the foreseeable future. Historically, the market for small tankers hasn't been interesting for many shipping companies, which means that the fleet is generally old, and there arent't any new ships built. However, Uni-Tankers' own fleet is only 6.5 years old today.

"Those two factors influence the way we view the market, and there's not really that much overcapacity. So if we can keep at it, I believe the market will get back on track within the foreseeable future," says Torben Andersen.

A year and a half ago, Uni-Tankers were working with a case in which the company expected a poor market for three years, followed by an improvement. Even though the market for the fiscal year 2013/2014, according to Torben Andersen, won't present much in the way of a rebound, he still believes his prediction of a rebound a year and a half from now could come true - even though it's difficult to say anything at this point.

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