High vessel inspection costs in the wake of the Stellar Daisy sinking have caused Polaris Shipping to deteriorate to a net loss for 2017.
The South Korean ore carrier specialist submitted its audited accounts on 30 March, showing a net loss of KRW80.1 billion (USD75.14 million), from a net profit of KRW53.5 billion in 2016.
Besides the costs incurred for inspecting its fleet of elderly converted ore carriers for signs of cracks and other defects, Polaris Shipping explained that losses were also booked on the demolition of defective vessels.
“We also booked foreign currency exchange losses due to the appreciation of the South Korean won. The net loss was due to these factors, rather than deteriorating market fundamentals. We expect to see an improvement for this year,” Polaris said.
The Stellar Daisy, loaded with more than 260,000 tonnes of iron ore from Brazil’s Vale, sank during a routine voyage to China on 31 March 2017, killing 22 crew members whose bodies were never found. Only two Filipino seafarers survived and they said that the vessel listed heavily before breaking in two and sinking.
The disaster highlighted safety concerns with Polaris’ ore carriers, which were converted from single-hull oil tankers that were originally built in the early 1990s. This caused Polaris to engage the Korean Register of Shipping and Lloyd’s Register to inspect its fleet of ore carriers.
Following the inspections, three ore carriers, Stellar CosmoStellar Galaxy, and Stellar Unicorn, were scrapped.