The charterer of the conventional product tanker declared the previously agreed option of USD 15,500 per day for 8 months starting mid-March.

Tankerska Next Generation (TNG) published a document on the Zagreb Stock Exchange announcing that the time charter for the ECO product tanker “Pag” has expired after a period of 8 months, out of a maximum of 12, and in accordance with the contractual terms, the vessel was redelivered from the charterer with whom it successfully operated during the specified period.

According to the fleet employment strategy, the Company will secure new employment for the vessel on the spot market in order to fully utilize the commercial and operational potential of the vessel within current market terms. Furthermore, the charterer of the conventional product tanker declared the previously agreed option of USD 15,500 per day for 8 months starting mid-March.

Our view on the new charter

We are happy to see another vessel contracted at a favorable rate. A quick calculation based on 2018 results (so assuming daily opex of USD 6,755 per ship, G&A of USD 903k, D&A slightly below USD 8m and interest expense slightly below USD 4m) makes us conclude the following:

• TNG records EBITDA breakeven at average TCE of roughly USD 7,200;
• TNG records net income breakeven at average TCE of roughly USD 12,600 per day;
• An average TCE of 14,500 a day could earn EBITDA of USD 16m and net profit of USD 4m (HRK 3.1 EPS).