Gulf Navigation Holding PJSC, one of the leading non-state ship owning and maritime services company in the region, reported a net loss of Dh29.07 million compared to a net loss of Dh15.31 million for the same period of 2010.
The company announced its consolidated financial results for the first nine months of 2011.
During the 3rd quarter the Company The loss for the period was again significantly impacted by both operational costs and disposal effects of the PROBOS vessels (with the last vessel being sold on 30th August) causing a loss of Dh 12.06M. In addition the current weak VLCC spot market coupled with high fuel costs impacted the earnings of the first VLCC vessel (Gulf Sheba) and regulatory dry-docking of the second VLCC vessel (Gulf Eyadah) resulted in 34 days of downtime in the quarter.
During the nine month period the Company has recorded a net loss of Dh 53.67M compared to a net profit of Dh 8.29M for the same period of 2010 (the 2010 profit for the nine month period included exceptional finance income of Dh 23.79M related to the cancellation of construction of two vessels). Net Operating Revenue was Dh154.68million compared to Dh219.60million in the prior year. Operating profit for nine months before depreciation, finance costs and non-operating items was Dh53.85m compared to Dh 93.21million in the same period last year.
Within the net loss for the nine month period of Dh53.67 million, a total loss of Dh 42.33M (79% of the overall loss) was directly attributable to the PROBOS vessels, namely further impairment on the value of the vessels (Dh5.99million), associated costs relating to the disposal of these vessels (Dh18.73million) and operating losses in the nine months of Dh17.61million.
The Company’s total assets as of 30th September 2011 stood at Dh2.525 Billion compared to Dh2.410 Billion at 31st December 2010.
Despite the difficult trading environment in 2011 Gulf Navigation Holding has continued to focus on its long-term strategy, positioning itself for the inevitable upturn in a cyclical industry.
Progressing discussions with potential equity partners to invest in the specialized VLCC joint venture to be incorporated in Kingdom of Saudi Arabia and taking significant steps in incorporating this new entity
Continuing discussions with Chinese entities relating to further opportunities in the VLCC segment in particular a further order for two additional VLCC new builds on the same terms as the first transaction
Gulf Navigation’s strategic plan calls for further expansion of the VLCC fleet (to 9 vessels – 18 million barrels) and the chemical tanker fleet (to 12 ships) as these are the sectors where we have an established presence and several, clearly identified avenues for profitable growth.
Commenting on the results, Engineer Abdullah Al Shuraim, Chairman of Gulf Navigation described “The first nine months of 2011 as “a very difficult time – but this is a challenging time for all ship-owning companies and the Board of Directors of Gulf Navigation Holding will continue to make the right strategic decisions for the long-term well being of the company.”
“The removal of the PROBOS fleet although very difficult was a necessary step that the company had to take – obviously the further losses incurred in this process in the third quarter were unfortunate but are indicative of the state of play within this market segment,” he said.
“The Company remained focused on the key strategic targets that we have set ourselves; in particular the continued expansion of the VLCC fleet as part of a new Saudi VLCC company, and re-alignment of the organization. On behalf of the Board of Directors, I can commit again that Gulf Navigation will continue to make decisions that will position the company in the right place for when the cycle turns and the industry yet again offers attractive returns for our shareholders.”