Norweigian panamax size container owner and operator Songa Container on Wednesday (25 November) published its third quarter (Q3) 2020 financial report stating that it remains optimistic about its existing scrubber investments improving in the future.
Nevertheless, the company noted it completed one scrubber installation during the quarter, and indefinitely postponed all remaining scrubber installations.
At the end of Q3 2020, Songa owns a fleet of 15 container vessels of which 12 have been fitted with scrubbers.
Within the last quarter, the 12th vessel of its 15-vessel fleet, Songa Calabria, completed her scrubber retrofit in the Mediterranean.
Songa Toscana remains unfitted with a scrubber, but given the prevailing market conditions Songa said the decision has been made to indefinitely postpone her scrubber installation.
Any future decision to retrofit Songa Toscana will be taken at a later date if and when the market conditions and dynamics along with fuel spread expectations deem this advantageous.
Songa noted the scrubber unit and any other equipment for the Songa Toscana will thus be held as inventory by the company.
This also remains the case for the Songa Iridium scrubber unit after her retrofit was also indefinitely postponed in the previous quarter and the scrubber tower/unit of Songa Iridium has been put up for sale.
“Fuel spreads between Compliant and Non-compliant fuel (3.5% vs 0.5% sulphur fuel) remain historically low and only marginal improvements to this situation will be seen in the near term as the World and its consumer and transportation habits continue to grapple with the ongoing COVID-19 pandemic,” said Songa Container.
“As a result, the profitability of the scrubber investments are expected to be low in the short term.
“However, the scrubbers have had the effect of improving the vessel attractiveness and flexibility in the market, noting in particular our high utilization rates and the ability of the scrubbers installed on Songa vessels being capable of ‘scrubbing’ down to 0.1% Ultra Low Sulphur fuel equivalent providing an extra dimension of adaptability for Charterers.”
The company said it maintains the expectation that a more normalised fuel market will develop in the post-COVID environment, and as a consequence, it is expected that the profitability on its scrubber investments will improve in the future.
Photo credit: Songa Container AS
Published: 1 December, 2020
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