KUCHING: Highly-geared shipping firm Swee Joo Bhd is mulling over fund-raising exercises to pare down its borrowings. Its short-term loans and long-term liabilities stood at RM500mil as at Sept 30, 2009.
Executive director Allister Hilton Smith said the group’s gearing now was at 2.4 times and it was looking at various ways to de-gear itself if market conditions permitted.
“The target is to bring down the gearing to between 1.5 and 1.8 times,” he told StarBizWeek, adding that Swee Joo’s interest expenses now amounted to about RM28mil a year.
Hilton Smith said the company had explored various corporate exercises in 2008 to reduce its borrowings but the plans had to be put off because of the global financial crisis.
“We are now going back to the drawing board to re-explore them,” he added.
Riding on the shipping boom, Swee Joo had in the past several years invested heavily in fleet expansion, including the acquisition of four chemical tankers to transport palm oil products.
With combined capacity of 38,000 tonnes, these tankers now ply between Malaysia and China, Malaysia and India as well as Indonesia and India.
Hilton Smith said internally, the group had taken measures to cut down on its administrative and operational costs.
Swee Joo was in the red, recording a group pre-tax loss of about RM11mil in the financial year ended Sept 30 (FY09).
For the first quarter ended Dec 31, the pre-tax loss widened to RM8.9mil on a turnover of RM93.8mil.
Hilton Smith said the company was working hard to return to the black at the end of FY10.
Through its several subidiaries, Swee Joo also operates 10 container vessels, seven general cargo ships, 13 support vessels and five dual-purpose vessels, plying routes in Peninsula Malaysia, Sabah and Sarawak and Asean countries.
It also provides transhipment services to mainline ooperators calling at Port Klang.
Wholly-owned subsidiary Johan Shipping Sdn Bhd, which is involved in container shipping, has a terminal service agreement with Bintulu Port that supports the latter’s vision to be the main transhipment port for the Brunei-Indonesia-Malaysia- Philippines East Asia Growth Area, and to guarantee throughput, strategic pricing incentives, operational enhancement, new shipping services and joint marketing efforts.
Swee Joo has enhanced its operations to include logistic services, like transportation, haulage, container repairs and related services.
SWEEJOO : [Stock Watch] [News]
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