OMI quintuples net profit

OMI quintuples net profit    OMI Corp., the major tanker owner and operator based in Stamford, Conn., reported a net income of $76.5 million in 2003, five times its earnings of $15.5 million for the previous year, as it benefited from the strong tanker shipping market.
   Operating income increased 155 percent, to $99.3 million last year, from $38.9 million in 2002. In 2003, time-charter-equivalent spot rates for Suezmax tankers climbed 89 percent, to $33,961 per day, the company said.
   Revenues for the year reached $318.7 million, up 60 percent from the $198.9 million revenues for 2002.
   For the fourth quarter, OMI increased its net income 37 percent, to $14.5 million, from $10.6 million in the same quarter of 2002. Operating income for the quarter rose 21 percent, to $21 million, and revenues jumped 42 percent, to $84.9 million.
   OMI reported an 84-percent improvement in the average spot rates for its Suezmax fleet in the fourth quarter of 2003, when compared to the third quarter of 2003. OMI described the tanker market as “very strong” in the fourth quarter.
   “The average time-charter-equivalent rates for Suezmax tankers in the West Africa to U.S. trade was more than double from the preceding quarter level, about 50 percent higher than the same quarter a year ago, and the second highest since 1990,” the company said.
   The increase in rates was the result of higher world oil demand due to improving world economic activity especially in the United States, China and South East Asia, cold weather in the current heating season, a tight U.S. natural gas market, and the decline of the U.S. dollar, at a time of relatively low oil inventory levels, according to the company.
   OMI said it may be fined $4.2 million in the U.S. after pleading guilty to one count of knowingly violating regulations to prevent pollution from ships by failing to maintain an “oil record book” on one of its vessels.
   Commenting on the Suezmax tanker market, OMI said that the world tanker fleet orderbook totaled about 79.6 million deadweight tons, representing 27.4 percent of the existing fleet at the end of 2003.
   But OMI believes that the accelerated phase-out of single-hull tankers due to new International Maritime Organization and European Union regulations “is expected to moderate the effect of the relatively large tanker orderbook.” At the end of 2003, approximately 40.4 million deadweight tons or 13.9 percent of the total tanker fleet was 20 or more years old, it said.
   OMI operates 36 vessel aggregating about 3 million deadweight tons.