Board of Director’s Report
Having executed fleet growth during the market downturn, the company continued to focus on operational improvements, reducing cost, enhancing our commercial performance and optimizing human capital. The board believes that these fundamentals will hold the company in good stead in the current challenging market conditions.
Our operating revenue was US$491.8 million in FY 2017 (US$506.5 million in FY 2016).
TCE income decreased to US$335.4 million from US$406.7 million, mainly attributable to the decline in LPG spot rates and lower fleet utilisation despite an increase in fleet size. These factors resulted in a decrease in TCE income of US$47.0 million and US$24.3 million, in the VLGC and LGC segments respectively. Charter hire expenses decreased to US$68.7 million in FY 2017 (US$69.5 million in FY 2016) due to overall lower hire rates for charter-in vessels.
Other operating expenses increased to US$146.8 million in FY 2017 (US$128.8 million in FY 2016) mainly attributable to an overall larger fleet size. The Group reported a loss after tax of US$44.8 million in FY 2017 (profit after tax of US$23.6 million in FY 2016). The decrease in profit was mainly due to the decline in TCE income arising from decline in LPG spot rates, lower fleet utilisation despite an increase in fleet size, and recognition of an impairment charge of US$4.6 million on vessels that were reclassified as assets held-for-sale.
Creating long-term value with good governance
This Report describes the Company’s Corporate Governance practices with specific reference to the Norwegian Code of Practice for Corporate Governance (English version of the original document “Norsk anbefaling - Eierstyring og selskapsledelse”) issued by the Norwegian Corporate Governance Board (the “Code”).
Identifying and managing our risks
Risk management is an integral part of value delivery and is fundamental to our business decision-making process. We have designed our dynamic yet strategic risk management framework to ensure minimal impact of any unfavourable events and market conditions.