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Introduction & Market Context
Ocean Yield reported solid financial results for the first quarter of 2025, maintaining its strategy of long-term charters and diversified fleet investments despite increasing macroeconomic uncertainty. The company presented its Q1 2025 results on May 15, highlighting continued growth in its vessel portfolio and charter backlog.
The shipping lessor has positioned itself to capitalize on higher demand for sale and leaseback transactions, which has emerged amid global geopolitical tensions. With an average charter tenor of 10.3 years across its 66-vessel fleet, Ocean Yield continues to prioritize stability and predictable cash flows in a volatile shipping market.
Quarterly Performance Highlights
Ocean Yield reported an adjusted EBITDA of $91.6 million for Q1 2025, representing a slight increase from the previous quarter’s $86.9 million and demonstrating consistent financial performance. The company’s EBITDA backlog stands at an impressive $4.1 billion, providing substantial revenue visibility for the coming years.
As shown in the following chart of quarterly adjusted EBITDA performance:
The company’s financial position remains robust with available liquidity of $201.1 million and an equity ratio of 31.7% as of quarter-end, a slight improvement from 31.2% in Q4 2024. Net profit for Q1 2025 was $18.3 million, down from $25.8 million in the previous quarter, primarily due to foreign exchange losses of $18.6 million that offset gains in fair value of financial instruments.
The company’s fleet and backlog composition shows a well-diversified portfolio across multiple shipping segments, with gas carriers (27%), crude tankers (24%), and dry bulk (19%) representing the largest portions of the EBITDA backlog:
Strategic Initiatives
During Q1 2025, Ocean Yield executed several strategic transactions that expanded its fleet and strengthened its long-term charter backlog. A key development was the increased investment in France LNG Shipping, where the company raised its economic interest to 11% in a portfolio of 12 LNG carriers. This transaction added approximately $250 million to Ocean Yield’s EBITDA backlog and involved three investment-grade counterparties.
The LNG investment structure is illustrated below:
Additionally, Ocean Yield announced a new transaction with Nordic American Tankers (NYSE:NAT) involving two Suezmax tankers built in 2016 on 8-year bareboat charters, adding $90 million to the backlog. The company also amended and extended leases for three 2018-built Suezmax tankers with NAT, securing an additional $170 million in EBITDA backlog.
The following image details these transactions with Nordic American Tankers:
Ocean Yield also reported the delivery of several vessels during and after the quarter, including four vessels to CMB.TECH NV on 15-year bareboat charters and one vessel to Braskem (NYSE:BAK) S.A. on a 15-year charter. These deliveries further strengthen the company’s long-term revenue visibility.
Detailed Financial Analysis
Ocean Yield’s income statement shows total revenues and other income of $56.6 million for Q1 2025, a slight increase from $56.1 million in Q4 2024. Operating profit improved to $45.6 million from $43.9 million in the previous quarter.
The company’s balance sheet expanded during the quarter, with total assets increasing to $2,430 million from $2,316 million at the end of 2024. This growth was primarily driven by an increase in finance lease receivables, which rose to $1,291 million (combining current and non-current portions) from $1,137 million in Q4 2024.
Total (EPA:TTEF) equity grew to $771 million from $723 million, bolstered by a $35 million tap issue in the OCY10 hybrid perpetual bond and retained earnings. The company’s debt position also increased, with total interest-bearing debt (short and long-term) rising to $1,572 million from $1,500 million in the previous quarter.
Forward-Looking Statements
Looking ahead, Ocean Yield expressed confidence in its position for selective growth, citing its low portfolio risk, robust balance sheet, and strong liquidity. The company noted increased macro uncertainty and geopolitical tensions, which have resulted in higher demand for sale and leaseback transactions—a potential opportunity for further business development.
Ocean Yield also reaffirmed its commitment to contributing to the decarbonization of the maritime industry, aligning with broader industry trends toward sustainability.
On the financing front, the company reported signing loan agreements for the first two LR1 newbuildings during the quarter, with agreements for the last two expected to be finalized during the first half of 2025. Additionally, Ocean Yield secured financing for two Suezmax vessels on long-term charter to Nordic American Tankers.
The company’s outlook statement emphasizes a cautious approach to growth amid market uncertainties:
With its diversified fleet, substantial charter backlog, and strategic focus on long-term contracts with quality counterparties, Ocean Yield appears well-positioned to navigate the evolving shipping market landscape while maintaining its financial stability and growth trajectory.
Full presentation:
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