The Suezmax day rates are higher than last year. During this second quarter of 2014 they appear to be trending to an average of $20,000 per day. On a rough basis, with 20 ships, and 90 operating days, we end up with revenues of about $36,00,000 and operating expenses of roughly $38,000,000. Adding in interest and other expenses, the total costs will be about $41,000,000. This suggests that on a GAAP basis there will be a $3,000,000 loss. Perhaps, on a cash flow basis, once NAO is added back in, that there will be a slight positive cash flow. As a back of the envelope calculation, this is encouraging. Prospects look good going forward.
On the international front, China appears to be building their equivalent of a Strategic Patroleum Reserve. Imports and production of crude exceed their refinery output by about 600,000 barrels per day. This is likely going into long-term storage, and represents an increase in shipping above current requirements. This is a positive development.
What do you base your operating expense numbers on?
NAT claims $12K/day per ship. using TCE $20K, and full availability that means the coarse numbers are $36mil gross, minus $21.6mil overhead(ish), with a rough net of $14.4million. Granted there are some other costs and ship availibility/fixture rates. But if you add in a (say for argument) .85 factor to account for utilization and corporate expence, that still leaves $$12.24 million net.
Explain your logic on operating expence better please.