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Sunday March 10, 2013 MYT 12:00:00 AM
Thursday April 18, 2013 MYT 12:37:25 AM
by jack wong
KUCHING: Hubline Bhd is looking for new potentially profitable routes to support its long-term growth.
Executive chairman and chief executive officer Dennis Ling said freight rates had been affected by the excess supply of ships.
“Hubline expects the economic conditions for both the containerised and dry bulk (cargo) businesses to be challenging amidst uncertain economic environment across almost all intra-Asian regions, including Malaysia, as well as the European debt crisis, which remains a risk to the global trade patterns,” he added in the company’s newly-released 2012 annual report.
Hubline, which operates a fleet of some 40 vessels, is principally involved in the provision of containerised and dry bulk shipping services, shipping agency and vessel chartering.
Ling said the group would continue to review niche routes to increase vessel capacity utilisation rates and profitability while maintaining its prudent approach in utilising resources with a focus on cost efficiency.
He said the group would also continue to explore opportunities across the intra-Asian regions to further strengthen its client base and cater for new demand from both existing and potential customers.
“Hubline shall strive to retain longer term customers and winning key contracts to support long-term earnings growth.”
Ling said due to the slowdown in major advanced economies and moderate growth momentum in Asia last year, the shipping industry faced poor demand, increased competition, rising fuel costs and stagnant freight rates. As such, trade-related activities remain subdued within intra-Asian and Malaysia, he added.
According to Ling, although the Malaysian economy enjoyed moderate growth last year, it did not completely escape the general weaknesses inflicting the advanced economies as well as economic sluggishness in China.
In the 12 months to Sept 30 last year, Hubline’s group revenue fell by 13% to RM499mil from RM570mil a year earlier. Almost the entire revenue came from its shipping division, which reported a slight drop from RM503mil in 2011.
“The drop in group revenue was mainly due to reduction in trading revenue which amounted to approximately RM66mil in 2011. Trading revenue mainly consisted of sales of coal,” Ling said.
The company’s net profit plunged to RM2.4mil from RM71.6mil in 2011.
Ling said due to weak economic conditions, some of the company’s customers had asked for longer credit terms.
“As demonstrated successfully in the past, Hubline remained nimble in responding to the changing demand of customers and business trends by taking full advantage of its diverse fleet of vessels. Several changes being made to Hubline’s vessel voyages during the year resulted in better than anticipated pick-up in sales.”
Ling said the company had invested more in IT infrastructure and operational platform in order to enhance employee productivity and lower business operating costs over the long run.
Meanwhile, Hubline’s independent non-executive director Richad Wee Liang Huat alias Richard Wee Liang Vhiat had further pared down his stake in the company after disposing of another 33 million shares of 20 sen each, or 1.02%, in an off market deal on Thursday. The block was sold for six sen per share, according to filings with Bursa Malaysia.
With the disposal, Wee’s shareholding has been reduced to 215.3 million units. He sold 70 million shares, also at six sen each, early last month.
Another substantial shareholder, Pau Chiong Ching, increased his stake in Hubline to more than 414.1 million units after acquiring 33 million shares on Thursday.
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