Western Bulk Chartering (WEST) H1 2024 earnings summary

Executive summary

• Achieved H1 2024 net profit of $2.5M, reversing a loss in 2023, driven by a strong Atlantic market and fleet expansion.

• Fleet expanded from 126 to 141 vessels, mainly through Panamax segment growth; average operated vessels rose to 133.

• New CEO, Torbjørn Gjervik, and key leadership appointments effective September 2024 to support growth.

• No dividend declared for Q2 2024 to preserve working capital for Panamax growth; position to be revisited for Q3.

• Net TC result rose to $15.1M, supported by a long Atlantic market position.

Financial highlights

• H1 2024 gross revenues of $647.4M, up from $574.2M in H1 2023.

• EBITDA improved to $2.4M from negative $5.2M year-over-year.

• Net TC margin per ship day increased to $626 from $310 in H1 2023.

• Administrative expenses at $12.8M for H1 2024, mainly due to higher bonus accruals.

• Free cash at period end was $12.7M, with no interest-bearing debt.

Outlook and guidance

• Maintains a long position in the Atlantic basin, expecting a seasonal rate uptick in H2 2024.

• Atlantic market expected to outperform Pacific in H2 2024 due to US grain export season and strong South Atlantic volumes.

• Stress test for H2 2024 shows a $47M Net TC rate outcome spread with +/-40% market rate change.

• Main risks include potential weaker Chinese imports and possible easing of Red Sea disruptions.

• Dividend position to be revisited for Q3 2024 as working capital needs stabilize.