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Lauritzen Bulkers


President Jens Ditlev Lauritzen



EBITDA in 2003 was USD 39.9 million, up USD 41.1 million on 2002. Pre-tax result was USD 41.2 million, up from the deficit of USD (1.6) million reported in 2002.

Expectations for 2003 were optimistic. Lauritzen Bulkers’ strategy of building up a fleet in 2002 with very low cargo coverage proved its viability. The result is very satisfactory and the best ever in the history of Lauritzen Bulkers.


Market development



The spot market at the beginning of 2003 had recovered significantly for all size groups compared with the summer of 2002. There was a general feeling that the market would improve still more in 2003, based on a recovery in the global economy, develop-ments in China were favourable and the limited deliveries of newbuildings scheduled for the year.

The first half of 2003 saw imports of iron ore rising strongly, mainly to China whose indigenous sources have proved to be insufficient to support the demand for steel created by the huge infrastructural developments being carried out there. Soy beans from South America helped underpin the strength of the market.


Then came the summer with drought in Europe, nuclear power plants in Japan still shut down for inspections, and serious accidents in Chinese coal mines leading to closures. All this led to a steep increase in demand for steam coal. With Capes already being fully occupied carrying still higher volumes of primarily iron ore, charterers had to look for tonnage elsewhere, and so demand for Panamax and Handymax started to rocket.

Port congestion problems were also being reported at the time, and this combined with the factors noted above led freight rates to soar, first in the spot and shortly after the period markets. Freight rates rose 100 % or more from an already high level during the last three to four months of 2003 as a result.

The fleet

The total number of ship days reached 24,744 in 2003, up 26% on the 19,673 days reported in 2002.

The Handysize pool arrangement with Island View Shipping was further expanded during 2003 to include five joint period charter vessels. At any given time during 2003, the Handysize pool operated between 55 and 65 vessels.

Lauritzen Bulkers bought a total of seven vessels during the last half of 2003. Four were second-hand, with two delivered in 2003 and the other two delivered in February 2004. Three resale newbuildings were acquired at attractive prices for delivery in 2005, 2006 and 2007.

The Handymax fleet consists of about 15 vessels and enjoyed a good market in 2003. The fleet will see one addition in the earlier part of 2004 and a further two vessels have been secured for delivery in 2005, all on time charter arrangements.

2003 was the first full year of Panamax operation. The limited fleet showed a trading profit for all vessels. Further forward tonnage was secured in the year with two deliveries in 2004 and one each in 2005, 2006 and 2007. These are all Japanese newbuildings on time charter, four of them with future purchase options.



During 2003, the fleet of bulk carriers in total rose by 3%. Capesizes, Panamaxes, and Handymaxes all expanded, whereas Handysize vessels (20-39,999 dwt) fell. The strong market reduced the amount of tonnage scrapped to a mere 3.5m dwt - one of the lowest levels recorded. Deliveries amounted to only 11m dwt which was also a very low figure historically speaking.

The order book swelled particularly during the last six months of the year, but at 16% of the existing fleet, it is still comparatively low.

Prospects for 2004

Although Lauritzen Bulkers came out of 2003 with a record result, it is anticipated that 2004 will be even better.

It is expected that the market will stay at a very high level for 2004 and although some cover by way of sub-time charter has been contracted in Handymax and Panamax, Lauritzen Bulkers will be able to take advantage of the high spot market.

With yard capacity constrained in the short-term, the market for existing tonnage is predicted to display interesting opportunities during 2004.

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