PETALING JAYA: Malaysian Bulk Carriers Bhd (Maybulk) saw its losses narrowing in the second quarter ended June 30 compared to the same quarter a year ago after dumping its loss-making associate company.
Net losses narrowed to RM6.94mil from RM151.27mil a year ago. Loss per share in the quarter dropped to 0.69 sen from 15.13 sen previously. Revenue rose 19.58% year-on-year to RM68.75mil.
Commenting on its first-half performance, which also saw net losses narrowing to RM17.70mil from RM165.62mil a year ago, the company said its performance improved mainly due to the non-recurrence of losses from its associate, and the absence of an impairment loss on an associate that was recorded in the first-half of the previous year, as the associate had been disposed in October 2018.
“At the operating level, the dry bulk segment reported a loss of RM3.514mil in this year’s first-half, compared to a loss of RM4.761mil in the previous year’s half, mainly due to lower operating costs for five chartered-in vessels (RM4.940mil), which was offset by lower charter rates, ” it said.
On Jan 1, 2019, Maybulk said it had adopted MFRS 16 leases and accordingly reclassified the leases of five chartered-in vessels from an operating lease to a finance lease.
“The combined depreciation in the right-of-use assets and interest expense on lease liabilities for these vessels in the first-half was RM4.940mil lower than the charter hire expense previously recognised in the previous year’s first-half period, ” it said.
Maybulk said including impairments, loss on the disposal of vessels and onerous contracts, the dry bulk segment’s loss increased to RM14.119mil in the first-half mainly due to a RM12.272mil loss from the disposal of a vessel.
The company said that the Baltic Dry Index had regained some momentum and the freight market saw improvements across all segments in the second quarter.
“The increase in seasonal soybean shipments from Brazil to China, which started in March 2019, and the resumption of Vale’s iron ore shipments in June 2019 helped to drive freight rates higher, particularly for Capesize and Panamax vessels, ” it said.
“The world operating fleet is expected to reduce in the second-half of 2019, as more vessels are taken off for scrubber retrofitting in preparation for new emission regulations, which will come into force from 2020 onwards. The added tonne miles from soybean and iron ore shipments, together with the reduced world operating fleet, should help improve freight rates in the second-half of the year, ” it added.
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