Monjasa reaps fruit from IMO 2020 preparations

Danish bunker company Monjasa reported an improved business performance on the back of the sulphur cap regulation that entered into force on January 1, 2020, marking a global transition of ships to cleaner fuels.

The company said that its volumes were up by 10 per cent reaching 4.5 million metric tons (mts) driven primarily by greater demand from the Americas. The demand saw a 35% increase from the region reaching a total of 1,150,000 mts.

The revenue for the full year of 2019 was slightly up year-on-year standing at $ 2.2 billion ($ 2.1 billion), while EBIT increased to $ 36.1 million from $ 8.3 million a year earlier. The profit for 2019 jumped to $ 26.5 million from last year’s $ 5 million, exceeding the company’s expectations.

The bunker supplier assigned improved results to the investments made last year in further ownership of the logistics surrounding marine fuel operations and cultivating IMO 2020 technical knowledge across supply chain relations.

To remind, back in August 2019, Monjasa acquired five bunker tankers to meet the increasing demand for compliant fuels ahead of IMO 2020.

The company marked its first ship-to-ship supply of compliant fuels from its Vinga Safir vessel shortly after that while supplying VLSFO and MGO 0.1% to vessels in the English Channel.

“For Monjasa, this much-anticipated shift to the more environmentally friendly marine fuels meant that our role of matching supply and demand with logistical solutions, became a critical factor across the shipping industry,” Group CEO, Anders Østergaard commented.

” Through extensive preparations together with our business partners, including suppliers, our oil terminals and fleet operations, Monjasa ended up strongly positioned to respond to a highly volatile market. ”

During the year, Monjasa increased the overall credit facilities by an additional $ 160 million, set to be used for developing of Monjasa’s global activities in and beyond 2020.

“With consolidated group equity increasing to $ 135 million and a high solvency ratio of 29%, Monjasa is positioned among the world’s most robust marine fuel suppliers,” Monjasa said.

“Given the unfolding global Covid-19 health situation, 2020 will be another demanding year for most global industries, including the maritime. “

Confirming its solid position among the world’s top-10 marine fuel suppliers in 2019, Monjasa said it was confident about the outlook for 2020.

The Danish company has a fleet of 19 tankers, 2 oil terminals and office locations in Europe, the Americas, the Middle East & Africa and Southeast Asia.

The transition of the global shipping industry to compliant fuels has been fairly smooth with some concerns being raised with regard to the quality of the new blends and some marginal breaches of the regulation being reported.

However, the implementation of the sulphur cap and its enforcement have been overshadowed by the impact of the COVID-19 pandemic on the global shipping industry.

Specifically, port authorities and global economies are more concerned with keeping the freight going than checking compliance especially on the back of growing delays of retrofitting projects at shipyards in Asia. among other things.

Furthermore, the price spread between compliant fuels and HSFO has also dropped due to the oil price war putting more strain on scrubber investments.

Therefore, the shipping industry would have to weather the perfect storm ahead before a more in-depth analysis on the implementation of the sulphur cap can be made.