KCC Closes Fourth Quarter 2024, Marking a Historically Strong Year
Klaveness Combination Carriers (KCC) delivered higher Time Charter Equivalent (TCE) earnings per on-hire day than standard market rates in Q4 2024, the company reported: despite weaker product tanker and dry bulk markets in late 2024 and early 2025, KCC reported an EBITDA of $20.2 million and an Earnings Before Tax (EBT) of $8.6 million for the quarter.
KCC operates a fleet of 16 combination carriers designed for transporting both wet and dry bulk cargoes. These vessels optimize efficiency by minimizing ballast voyages and capitalizing on trade imbalances, positioning KCC uniquely within the shipping industry. CEO Engebret Dahm highlighted 2024 as a historically strong year for KCC, with fleet-wide TCE earnings surpassing product tanker earnings in what was an exceptional year for that sector. KCC achieved TCE earnings of 1.5 times that of product tankers and 2.6 times that of dry bulk, showcasing the efficiency of its combination carrier fleet. Although earnings declined in Q4 due to challenging market conditions, Dahm expressed confidence that the company’s efficient trading strategy will continue to generate premium earnings in 2025.
Market Overview
The decline in earnings from Q3 to Q4 was mainly attributed to lower CLEANBU TCE earnings and increased off-hire days due to vessel dry-docking. Despite these challenges, CABU TCE earnings remained relatively stable, supported by strong caustic soda shipments. The fleet maintained high efficiency, with 91% of trading conducted in combination mode and only 13% ballast for the quarter.
However, CLEANBU TCE earnings fell significantly due to weaker spot markets in the product tanker and dry bulk segments, the impact of vessel dry-docking, and IFRS 15 effects. Consequently, average fleet-wide TCE earnings for 2024 stood at a record-high $35,368/day, slightly above 2023 levels. Despite the strong TCE performance, increased dry-docking and higher costs led to a decrease in profit after tax for 2024, which came in at $81.4 million—down 6% from the record-breaking 2023. EBITDA for the full year was $126.5 million, compared to $134.9 million in 2023. However, key financial indicators remained robust, with a Return on Equity (ROE) of 23% and a Return on Capital Employed (ROCE) of 16%.
Outlook for 2025
Looking ahead, KCC expects to continue leveraging its efficient trading model to secure high earnings premiums. Approximately 90% of CABU wet capacity for 2025 is already secured, ensuring stability in that segment. However, the company acknowledges that a seasonally weak dry bulk market in early 2025 will likely impact overall earnings.
KCC continues to focus on sustainability, with the carbon intensity (EEOI) of its fleet ending at 6.6 for 2024. While slightly above the company’s target of 6.4, ongoing energy efficiency improvements and maintenance of vessel coatings are expected to drive further reductions in emissions.
