Annual report

Thorco Projects triples revenue and increases profit

Thorco Projects has tripled its revenue last year and posted a small profit of USD 3.4 million. However, the purchase of expensive and loss-making vessels is still troubling the company.

The revenue of the asset-light company tripled in its third financial year, jumping from USD 45.7 million in 2017 to USD 138.7 million last year. Thorco Projects also managed to increase its net profit, which grew from USD 1.5 million to USD 3.4 million in the same period.

The management of the company considers the results satisfactory, it notes in its annual report. “The market conditions in 2018 remained very difficult. However, Thorco Projects has succeeded to remain its leading position in the multipurpose and project segment through a strong focus on parcelling capabilities, customized solutions and dedicated employees,” the company states.

For 2019, the company expects to further improve its financial results. “By the end of 2018 the freight rates in the multipurpose and project segment started to improve, and it is expected that the positive trend will continue in 2019, which will have a positive influence on Thorco Projects result,” the management writes in its report.

Another positive development for Thorco is that the company successfully ventured into the dry bulk market with the in 2016 established shipping company Trithon Bulk, which operates dry bulk vessels in the Handy and Ultramax segments. Trithon Bulk increased its revenue with 23% to USD 171 million last year and posted a net profit of USD 1.5 million, compared to a profit of USD 850,000 in 2017.

Loss-making ships

The positive result of Thorco Projects backs the decision of owner Thor Stadil to transform Thorco from a shipowning company to an asset-light ship operator. That decision was made in 2016, following the purchase of expensive loss-making ships which had been weighing heavily on the company’s results for years.

To clean up the company, the loss-making vessels were placed in the companies Thorco Shipping and Sofia Shipping with the goal to sell them. Both entities have posted significant losses in recent years.

Thorco Shipping’s annual result for 2018 shows a net loss of USD 13.7 million, following losses of 10.8 million and 13.5 million in 2016 and 2017, respectively. The company also has significant negative equity of USD 36.9 million.

Sofia Shipping, which was established with the sole purpose of taking ownership of the loss-making vessels, actually booked a profit of USD 11.7 million in 2018, after losing nearly USD 100 million in its first two years.

PCJ reached out to Thorco Projects for a response, but the company was unable to comment on the financial results at the moment. However, in a recent interview with the Danish website Shippingwatch CEO Thomas Mikkelsen said the company is close to selling off all vessels.

“We’ve reduced our owned tonnage from more than 20 ships to now slightly less than a handful. It’s been a couple of years with heavy decisions in terms of cleaning up these assets, but now we’re almost there,” Mikkelsen tells ShippingWatch.

That Sofia Shipping was able to post a profit in 2018, is contributed to the fact that the losses on ship sales were smaller than expected.

Author: Adnan Bajic

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