Profit Falls at Star Reefers

Specialist refrigerated shipper Star Reefers has reported a drop in second quarter net profits as spot market freight rates for reefer vessels hit their lowest point in several years.

Oslo, Norway-based Star Reefer’s profit fell to US$3.8 million, down from US$5.1 million for the same April-June period in 2009. Net income for the first half of the year reached US$7.6 million, compared to US$19.9 million during the first half of 2009.

Net operating revenue dropped to US$48.6 million, down from US$54.1 million for the second quarter a year earlier. Gross revenues reached US$129.7 million during the first half of this year, compared to US$133.6 million during the first half of 2009.

Company officials attributed the lacklustre result to the lingering effects of the global recession. Lower demand for perishables in Europe and Russia caused by poor exchange rates with the U.S. Dollar was the key contributing factor.

Star Reefer officials also said the extra capacity of two newbuildings delivered during first half of this year was less than the effect of laying up seven vessels. The reduction in revenue was due to lower market rates and decreased capacity.

Ship operating and administrative expenses totaled US$46.8 million during the first half of this year, compared to US$53.7 million during the same period in 2009. Most of the reduction was due to the lay-up of the seven vessels.