Monday, March 02, 2009
Maybulk looks to buy vessels
Monday, 02 March 2009
Malaysian Bulk Carriers Bhd (Maybulk) is looking at acquiring new vessels this year as the collapse of the dry bulk market has provided some bargains, says executive chairman Teo Joo Kim. Maybulk is looking around for newer second-hand vessels or vessels resold from shipyards, he says.
“We want to be better prepared when the market picks up. But we are not on aggressive acquisition mode as the dry bulk market, going forward, is still uncertain although the current Baltic Dry Index (BDI) has been showing positive growth from its December lows,” Teo says after a briefing on the company’s 2008 financial results.
The BDI, a measure of shipping costs for commodities, plunged 94% to 663 points on Dec 5 from last year’s peak of 11,793 points on May 20.
The index stood at 1,950 points on Thursday.
The recent freight market recovery, after China resumed iron ore shipments from Australia and Brazil, is believed to be unsustainable due to the considerable overhang still in the market.
Besides acquisitions, Maybulk will also be looking at selling some of its vessels that are over 20 years old this year. “Again, we are looking at the best offer to dispose of our old assets,” Teo says.
Maybulk currently owns eight bulk carriers, of which three are considered old. It disposed of its 25-year-old Alam Sempurna vessel for RM8.1mil last month.
Besides bulkers, Maybulk owns and operates three product tankers but that segment is also going through a slump due to the economic downturn, although it is not as bad as the dry bulk business.
But the oil and gas sector may offer some comfort to Maybulk. The shipping company recently diversified into the oil and gas offshore services business via the acquisition of a 22.08% stake in PACC Offshore Service Holdings.
“Oil and gas offshore shipping continues to outperform other shipping sectors and it may be the main revenue contributor in the current financial year,” Teo says.
Maybulk posted a 96.9% drop in net profit in its last quarter ended Dec 31 to RM4.96mil against the same quarter in 2007. Revenue for the period shrank 36.2% to RM138.1mil.
The lower revenue was mainly due to a decline in time charter charges, from US$43,386 per day in the third quarter to US$28,623 per day in the fourth quarter.
For the full year, it suffered only a 9.7% drop in net profit to RM521.7mil while revenue increased 18.6% to RM721.2mil against FY07 on gains made earlier in the year, before it felt the impact of the global economic slowdown.
“This year, we are still targeting to gain profit although it may not be as good as last year,” Teo says.
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