ACA Shipping is on the expansion mode, as evidenced by the latest investments undertaken and illustrated in Mr. Angelopoulos', CEO of the shipping company in his latest interview with "Hellenic Shipping News". He declares the current
period as proper for new investments at these low ship values. He also agrees with the notion that current rates are good enough to offer profitability to those owners that acquired vessels during this period at substantially lower values.
ACA appears to be on the "offensive" lately, moving ahead with new ship investments. Could you provide with some details on these purchases? What's the strategy behind those deals? How well do they position ACA in order to fare better in terms of earnings in the future?
In an effort to strengthen present position on the specialized project cargo market of Continent to Black sea and within Mediterranean, about three months ago we proceededΒ with the purchase of 2 general cargo fully box IMO fitted vessels from her British Owners renamed to "ARIADNE' and "DANAE" . Despite market prospects had not been clear for so long, I believe that timing to renew fleet with more modern tonnage seemed the most proper one, bearingΒ in mind also that ACA sold half her fleet (two out of her four ships) last summer when prices were remarkably higher.
Would you say that the fall in ship values is such that provides owners with tremendous investment opportunities?
Still remember an interview we had together In September 2008 when market had already experienced an approximate 50 pct drop and your questions were more or less the same. Is it a good time to invest? Let me recall your memory and remind you that I was indeed negative at that moment.
As a person, I am strongly of the opinion that when there are some "true' pportunities in the horizon, one should definitely seize them! This strange period of the last 12 months, despite the numerous problems that has created, has also offered good prospects for the ones able to invest. In that respect we have decided to add the two modern vessels to our fleet and look for one or two more so as to attract better paying cargoes and more profitable deals or contracts. So I would say I am not as pessimistic as I used to be, or as pessimistic as most of my colleagues are at the moment.
How difficult was it to receive the proper financing for these moves?
As previously commented, we had the "luck' to be ahead of the market crash and sold our two older vessels MV IOLE and MV YANNA A at such rates that enabled us not to need any bank finance. To tell you the truth I feel our last deal would have not been completed if a "cash' payment was not possible as the deadlines were indeed pretty short.
How did you "shield" your company in order to weather this crisis?
Once a company's strategy is not to make expansions that cannot be afforded and openings that cannot be substantially financed, then I believe a crisis-no matter how rapid or severe is- can be tolerated and survived. We in ACA, are exactly of this opinion. We'd rather not be overexposed to projects that require mainly bank financing and prefer taking on projects that can be covered with own funds or with a bank financing that "makes sense'. This fundamental principle of ours, has been enabling us over the years to go by -as limited influenced as possible- all the crisis
Do you think that the current market environment will keep providing opportunities and if yes, in which sectors of the shipping industry in particular?
Definitely YES. Opportunities will always be there in good or bad market, but if we're talking on a short term basis and we want to focus on the next months, then I would say that Bulkers will lead the way once again as well as Container ships which as per my opinion have reached the bottom already.
Recently, we witnessed a substantial rally of the Dry Bulk Index, which rose for 24 straight sessions, before retreating once again. What triggered this rise?
Do you think that the market will remain volatile during the following months?
During the period prior to the remarkable crisis that has hit the global economy along with the shipping industry, there were huge volumes of commodities that have been purchased and acquired by major Traders. Once the crisis started, and purchasing power commenced diminishing, these volumes as oneΒ can easily understand, could not be streamed into the markets due to lack of demand. Therefore they started piling up in stock. However, even at lower prices and at lower rates timewise, commodities eventually began to be redistributed and consequently the stock of those dropped. This more or less happened during this spring and had as a result Traders being engaged at buying again in order to increase their stock and as a chain reaction "“along
with the intervention of the Chinese industry, we experienced the last rally of the Dry Bulk Index.
Many suggest that the current freight rate levels are enough to sustain a ship owner, especially if he has acquired many vessels prior to the record values of 2007-2008 or during this year. Do you agree?
Fully agree with this opinion and I believe any Biffex levels in excess of 3,000 offers a healthy environment for the industry.
What about the Mediterranean cargo market? How are rates shaping up there? What are your estimates for the future of the Mediterranean market?
The worst months in Med market were July/August 2008 and December/January 2009. Rates have not been sharped up as much as in the bigger tonnage. However I can't say that present market condition is not too bad. Not a period to "make money' for sure, not a period where you can relax and just pick for the proper cargo but not a catastrophic one unless you own ships which have been bought during the first 6-7 months of 2008.
If we talk about future estimation, my personal theory is that no one can really predict shipping or stock markets, fuel or currency prospects. Their only "weapon'Β in an investor's hands (in our case in Shipping) is loyalty in the fieldΒ you are involved in and the profession you pursue, which always gives the benefit of being inside the market from "day one" of recovery and ensures you will be able to gain all the profit deriving from an eventual recovery.
Nikos Roussanoglou, Hellenic Shipping News Worldwide