UACC turns a profit as shipyard dispute settled

United Arab Chemical Carriers turns its first profit in half a decade as merger talks ongoing
Per Wistoft, CEO, United Arab Chemical Carriers
Per Wistoft, CEO, United Arab Chemical Carriers

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Dubai-based United Arab Chemical Carriers has made a profit for the first time in five years, according to financial information released this week.

In 2014, the product and chemical tanker carrier saw an EBITDA of US $38 million, which CEO Per Wistoft describes as “significantly better than what we had expected”.

Wistoft was appointed CEO about a year and a half ago, taking over the position from Jens Grønning, who is currently the CEO of Team Tankers, formerly Eitzen Chemical.

"Jens left behind a solid foundation and we have delivered what we promised and even more. We are very pleased and this is a result of the strategy that we laid out in the fall of 2013,” says Wistoft.

He was speaking to Shipping Watch.com, and very little additional financial information was released as UACC no longer publishes financial reports.

However, the most recent report from 2012 showed a deficit of US $9.7 million, which was partly a result of a disastrous shipbuilding contract with the yard SLS in Korea.

UACC had ordered ten vessels from the shipyard, but they were all delayed and ultimately cancelled. UACC had paid hundreds of millions of dollars as part of the contract, and it was not until 2014 that the funds were retrieved.

The 2013 strategy to which Wistoft referred was one of expansion, which the recovered money funded through 2014.

CLICK HERE to see what the 2013 strategy entailed and how it might be impacted by a merger with Milaha

RELATED: UACC spends big on second hand purchases

“We purchased six new MR product tankers and MR chemical tankers and put them in the fleet,” says Wistoft. “Then we carried out a reorganisation of parts of our fleet with a consortium of banks headed by Nordea.”

“And of course, we saw an overall recovery in the product tanker market over the last two months of last year,” he adds. “We focused on our home market, which is the area around the Persian Gulf, the Red Sea, East Africa, India and South Africa. It has proven to be a good strategy.”

Wistoft is bullish on the year ahead, and says the carrier still wants to reach a fleet goal of 30 vessels, which the possible merger with Milaha would help facilitate.

Milaha’s plan is to combine the two carriers' fleets of product and chemical tankers. Milaha, which owns a share of 12.2% in UACC, currently has five product and chemical tankers, where UACC owns a fleet with a total of 22 MR and Panamax LR1 vessels.

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