Image: Eagle Bulk Shipping

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Eagle Bulk Shipping Inc. reports that higher marine fuel prices were a key reason for the rise it saw in voyage expenses during the second quarter (Q2) of 2018.

The US-based owner and operator of dry bulk vessels saw voyage costs increase by $3.8 million, or 28.4 percent, to $17.2m in Q2, compared with $13.4m during the corresponding period last year.

Between January and June, voyage expenses jumped $13.0 million, or 48.7 percent, to $39.7m in a direct comparison with 2017.

In addition to the higher price of bunker fuel, Eagle Bulk explained that the rise in voyage expenses was also due to an increase in the fleet size and a rise in the number of voyage charters performed during the aforementioned three- and six-month periods.

Profit achieved as higher revenue covers rise in operating expenses

For Q2, Eagle Bulk posted a net income of $3.45m, which was a $9.34m improvement on the $5.89m loss recorded a year ago.

For the first half (H1) of the year, meanwhile, net income was $3.50m - a $20.46m swing compared to the 2017 loss of $16.96m.

Net revenue in Q2 rose by $21.31m, or 39.7 percent, to $74.94m, whilst H1 revenue was up $54.82m, or 55.1 percent, to $154.31m.

Total operating expenses in Q2 - affected in part by the higher voyage expenses - increased by $12.01m, or 22.3 percent, to $65.95m, whilst for H1 the rise was $34.70m, or 33.3 percent, to $139.0m.

However, thanks to the higher revenue, Eagle Bulk managed to achieve a Q2 operating income of $8.99m, compared to last year's loss of $307,613, and a H1 operating income of $15.30m, compared to the 2017 loss of $4.8m.

Commenting on the results, Gary Vogel, Eagle Bulk's CEO, said: "The results are a reflection not only of an improvement in the underlying dry bulk market, but also of the proactive measures we have taken to enhance the balance sheet and optimize the fleet make-up. The value of our differentiated business model and our team's ability to execute has now been validated over six consecutive quarters."