ShippingWatch

Royal Arctic Line: We are financially vulnerable

Royal Arctic Line has been granted permission to increase its freight rates, but the company still has significant planned expenses related especially to new ships, and no real prospects of increasing freight volumes going forward. "Not a lot has to go wrong for it to knock us down," CFO tells ShippingWatch.

Photo: Royal Arctic Line

2014 was a good year for Royal Arctic Line, which is owned by the Greenland government and holds a concession on sailing between Denmark and Greenland. The carrier managed to turn the first deficit in 20 years, from 2013, into a profit - and the company wants to stay in the black, CFO Ole Baunbæk tells ShippingWatch.

"When we were looking at the results for the first half of the year, things were not looking good, but things turned out well. In 2010 after the financial crisis we launched a cost reduction program that had a partial effect in 2014, thus helping us out. We also implemented a five percent rate increase, which helped us a great deal, while we also secured some extra contracts, including for the Thule Air Base. We're not on the scope of A.P. Moeller-Maersk, but we consider last year a significant improvement," says Ole baunbæk.

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