Greek bulker operator Diana Shipping is the latest shipowner to use its Q3 earnings results as a platform for explaining its 2020 sulphur strategy.
On presenting the improved results for the quarter and announcing a share buy back plan and intentions to sell older vessels in its fleet, the company also came out against using scrubbers as a means of complying with the global cap sulphur reduction in 2020.
Asked if scrubbers featured in the company’s plans, Ioannis Zafirakis, chief strategy officer and secretary said, “It's a matter of an investment opportunity that we have to consider potential risk, reward and returns. People do not understand that scrubbers is not part of our business. Scrubbers is an investment that we have to make various assumptions to see whether this is something that is going to produce a nice risk reward ratio for our use of cash. At the moment, we think buying back our stock has much better return possibilities than investing in scrubbers.
People are getting confused as if a scrubber is a ballast water treatment investment where you have to do it compulsorily, which it's not. It's an investment in order to enhance, possibly, your returns, accepting a specific risk by investing a specific amount. People should do their numbers and justify the risk that they are accepting in order to make a possibly -- a possible return. We have done that, our research now, and we do not see it now as an attractive opportunity, investment-wise.”
On a related matter concerning ship speed if bunker prices increase, Zafrikis said, “Slowing down is not the solution to the problem simply because there are technical reasons why you cannot slow down as much as you want, firstly. But secondly, everything depends on the time charter rates, whether this is going to become more economical for the charter or not. The slowing down story of the picture, we don't appreciate at all. We don't like what we are hearing because vessels didn't slow down when rates were at $4,000 per day and $3,000, and they're going to slow down now. I don't think that this is a possible scenario”.