Unitholder queries Rickmers Trust vessel management fee hike

Singapore

THE terms of Rickmers Trust's vessel management contract have come under scrutiny. An activist unitholder is challenging the basis of an annual increment that drains cash amid a protracted industry downcycle.

The business trust posted a 2 per cent hike in first-quarter vessel operating expenses to US$9.74 million, fed by among others, the same quantum of increase in the contracted vessel management fee with its affiliate Rickmers Ship Management. The increase came into effect on Jan 1, 2016. Q1 saw Rickmers Trust posting a net loss of US$1.4 million, compared with a net profit of US$7.03 million a year ago, as revenue fell 26 per cent to US$21.3 million. For the third quarter in a row, the business trust did not declare a distribution for unitholders.