2016: Navigating through the worst market since 1986

The dry bulk market during the first quarter of 2016 turned out to be the worst ever registered. The Baltic Supra Index (BSI) which averaged 6,965 in 2015 (down 30 percent from 2014) dropped to all time low of 2,544 during February, ending the first quarter at an average of 3,801. The second quarter improved to 5,795 and third quarter likewise closing at 7,064 before a strong grain season brought some real improvement in the final quarter, which ended at an average of 8,316. This helped the average for the year and resulted in the overall average for 2016 which reached 6,601 which despite the dreadful first quarter was only 5 percent below 2015.

Ultrabulk’s market presence was consolidated and affirmed during 2016, where the fleet increased YOY to an average of 123 vessels, which was 5 more than the previous year. Total physical ship days increased reaching 41,143 in 2016 up from the 37.788 recorded in 2015. Cargo lifted increased correspondingly to 42 million tons in 2016 compared to 37.1 million tons the previous year. Cargo contractual commitments were slightly overmatched by corresponding long term vessel time charters leaving the company with a slightly long portfolio. The core fleet grew by 9 units to reach 40 and a further 8 newbuildings, mainly owned units, will be delivered by 2019 and which will include vessel types from all size segments where the company is active.

The Ultrabulk Parcel Service has been well received on its core trading routes and has added a Far East service. The new specialized MPP Service which focuses on the Europe/Africa/Europe trades has attained a firm market presence. These additional services provide clients with an even more diversified product range, and have resulted in cross segment synergies and opportunities.

In order to strengthen overall coverage of Asia, regional chartering activities there are now managed by a large

team based in Singapore. We are confident that the new set-up will facilitate increased servicing and planning flexibility within the region, to the benefit of the company and our clients alike. A new regional office will open in 2017 in Cape Town in order to strengthen our presence and servicing of trades to and from the South African continent with via a dedicated local team.

Ultrabulk is an operator, with a proven business platform and a dedicated staff geared to pursue long term partnerships and sustainable growth to the mutual benefit of the company and its partners. A substantial portfolio of cargo commitments helped Ultrabulk to manoeuvre in a very tough market environment during the year.

The financial result for 2016 was considered very acceptable under the prevailing trading conditions and has strengthened our platform, which is ready for future opportunities

 
The outlook

Growth in demand is expected to reach about 3.3 pct in 2017 slightly exceeding expected fleet growth of about 2 pct. 2017 has started at a high level, but there is still reason for concern and as such subsequent developments may disappoint in the second half of the year.

Ultrabulk consolidated their market presence during 2016 and can move forward taking humble comfort and pride in the fact that we start 2017 based on a strong business model, solid financial situation and with an even stronger and very dedicated team, ready to address the challenges and opportunities ahead, ultimately focused on meeting our customers ever changing needs and as “A partner you can trust”.


Business built on partnerships

Ultrabulk runs a business platform based on customer needs. Close customers are considered as partners and considerable effort is put into visualizing and meeting their needs. Long term perspectives drive investments, aimed at building personal relations and cooperation’s. Resources are allocated to analysing and improving operations cost efficiency and investment are made on an ongoing basis in port equipment and facilities in order to improve operations further and as an integrated part of the long term business platform.

Customers are served from offices around the world located in Chile, Brazil, USA, Germany, Denmark (H/O), Hong Kong and Singapore. A new office dedicated to serving trades from and to the South African continent will be opened in Cape Town in the first half of 2017. Each office is duly empowered with sufficient authority to make the right business decisions in a quick and efficient manner. Partnerships with customers are the core of our business. They are supplemented with joint ventures which have been established for the ownership of vessel, as well as cargo handling projects, on the basis of a close cooperation with key customers around the globe. Each joint such operation plays and will continue to play an important role in our long term business strategy.

Risk management is an integrated part of the business platform. Focus is on strict counterpart control both prior to entering agreements and on a current basis. The control systems assist in relation to monitoring developments and ensuring risk is constrained at acceptable pre-defined levels, which are duly aligned with our strategy and commensurate with our financial strength.

Ultrabulk is primarily an operator, which is increasingly supported by a growing ship owning side. Core segments and customers are served via a modern diversified fleet of around 100 – 150 vessels including MPP, Handysize, Handymax, Supramax, Panamax and Kamsarmax vessels. The core fleet consists of around 40 long term vessels including both time chartered, owned and partly owned units. The company is an operator with industrial focus and decades of experience handling traditional dry cagoes such as coal, metals, concentrates, grain, fertilizer and bio fuels.

We build long term partnerships based on integrity, excellence and passion
 

Ultrabulk also offer specialized services in order to meet customers’ requirements for Parcel and MPP Services. The Parcel Service offers regular sailings within the Atlantic and serves trades out of China. In the first half of 2017 a parcel service primarily from the South African continent to China will be added. The MPP Service offers regular sailings from the Baltic, UK, Continent, Mediterranean, Adriatic and Black Sea to East and South Africa, including islands either via West Africa or Red Sea and back loading from Mozambique and South Africa to the Mediterranean, Continent, UK and Baltic.

The partnership philosophy is based on long term relationships,combining cargo contracts and tonnage procurement into the vital core of the Ultrabulk business model. These long term partnerships are the basis for a stable platform and sustainable future growth.


An operator with an industrial focus

Our partnership philosophy is based on long term relationships, combining cargo contracts and tonnage procurement into the vital core of the Ultrabulk business model. These long term partnerships are the basis for a stable platform and sustainable future growth.


A key factor to assuring customer satisfaction rests with our experienced and professional team of operators. Stra-tegically located in offices around the world and supported by a state of the art back office system. They work closely together and with partners, taking pro-active steps night and day, in order to take advantage of opportunities and equalling avoid problems escalating. Our system positively supporting these efforts to provide the service level our 

partners need, by assuring focus is maintained on critical factors at all times. It also facilitates strict risk manage-ment and is a fully integrated part of the communication system. A designated operator is allocated to each partner in order to ensure a smooth dialogue and create a con-structive environment, where we understand our partners’ requirements and priorities at all times.


 

»Understanding our partners business is essential to us, as we strive to deliver the best possible transportation solution each and every time.«

Hans-Christian Olesen, Executive Vice President, Head of Panamax and Supramax


We remain …
A partner you can trust ...