Malaysian Bulk Carriers reports Q1 profit
Malaysian Bulk Carriers (MBC) has registered first quarter pre-tax profit of RM99.698 million (US$31.2 million), down 32.6 per cent from a year earlier due to a weak tanker market as well as higher operating expenses. Revenue for the three months ended 31 March 2008 surged 68 per cent to RM180.464 million from RM107.417 million for the same quarter last year, it said in a filing to Bursa Malaysia on May 21. Earnings per share fell to 9.23 sen from 14.37 sen previously.
MBC said vessel operating expenses were lower in Q1 2008 compared to the same quarter last year due to the reduced fleet size.
However, the expanded charter-in activities have increased operating expenses.
In the first quarter of 2008, the group chartered-in a total of 8 vessels for its operation compared to only one for the same period in 2007.
The group provided a RM20.2 million mark-to-market loss for its quoted investments.
Administration cost and finance cost have both increased due mainly to the increased cost of the group's structured leases for its assets.
Such structured leases were undertaken to reduce the cost of the group's financial borrowings.
Excluding RM74.0 million gain from sale of vessels in the first quarter of 2007, the profit attributable to shareholders of RM92.3 million for Q1 2008 was 32 per cent higher than that of the same period last year, it said.
MBC said the sharp rise in revenue was due to an increase in hire days from the group's dry bulk fleet inclusive of third party charter-ins as well as from a firmer dry bulk market.
While the Baltic Dry Index (BDI) retreated from its highs of late 2007, the average TCE rates were substantially higher in Q1 2008 (US$37,803 per day) compared to the same period last year (US$21,798 per day).
The BDI opened the year at 8,891, but ended the first quarter 11 per cent lower at 8,081.
MBC said the tanker market continued to be weak in the early part of the first quarter 2008 but the Baltic Clean Tanker Index (BCTI) closed the first quarter at 1,192 - a 10 per cent increase over 1,083 at the start of the year.
Against the same period last year, the average TCE achieved for Q1 2008 was 6 per cent lower.
MBC said since the end of March, the dry bulk market has strengthened, closing at 11,709 on 19 May 2008, reflecting a 45 per cent increase over the March 2008 figure.
It said the general outlook for the dry bulk sector is positive with the economies of China, India, Brazil and the Middle East continuing to support the freight market.
Continued demand for grains, iron ore and coal has underpinned the resurgence in the dry bulk market.
However, the tanker market continued to be lacklustre due to continued high tonnage availability and new building supply and a more subdued demand for tankers as compared to dry bulk carriers.
MBC said the group has sold and delivered to its buyers 2 dry bulk carriers in Q2 2008 and a gain on disposal of RM147.3 million will be reported in the next quarter.
MBC's board is positive over prospects in FY2008 and expects to deliver another set of good results.
"Prospects going forward remain good for the dry bulk sector but is expected to be soft for the tanker market," it said.
MBC said vessel operating expenses were lower in Q1 2008 compared to the same quarter last year due to the reduced fleet size.
However, the expanded charter-in activities have increased operating expenses.
In the first quarter of 2008, the group chartered-in a total of 8 vessels for its operation compared to only one for the same period in 2007.
The group provided a RM20.2 million mark-to-market loss for its quoted investments.
Administration cost and finance cost have both increased due mainly to the increased cost of the group's structured leases for its assets.
Such structured leases were undertaken to reduce the cost of the group's financial borrowings.
Excluding RM74.0 million gain from sale of vessels in the first quarter of 2007, the profit attributable to shareholders of RM92.3 million for Q1 2008 was 32 per cent higher than that of the same period last year, it said.
MBC said the sharp rise in revenue was due to an increase in hire days from the group's dry bulk fleet inclusive of third party charter-ins as well as from a firmer dry bulk market.
While the Baltic Dry Index (BDI) retreated from its highs of late 2007, the average TCE rates were substantially higher in Q1 2008 (US$37,803 per day) compared to the same period last year (US$21,798 per day).
The BDI opened the year at 8,891, but ended the first quarter 11 per cent lower at 8,081.
MBC said the tanker market continued to be weak in the early part of the first quarter 2008 but the Baltic Clean Tanker Index (BCTI) closed the first quarter at 1,192 - a 10 per cent increase over 1,083 at the start of the year.
Against the same period last year, the average TCE achieved for Q1 2008 was 6 per cent lower.
MBC said since the end of March, the dry bulk market has strengthened, closing at 11,709 on 19 May 2008, reflecting a 45 per cent increase over the March 2008 figure.
It said the general outlook for the dry bulk sector is positive with the economies of China, India, Brazil and the Middle East continuing to support the freight market.
Continued demand for grains, iron ore and coal has underpinned the resurgence in the dry bulk market.
However, the tanker market continued to be lacklustre due to continued high tonnage availability and new building supply and a more subdued demand for tankers as compared to dry bulk carriers.
MBC said the group has sold and delivered to its buyers 2 dry bulk carriers in Q2 2008 and a gain on disposal of RM147.3 million will be reported in the next quarter.
MBC's board is positive over prospects in FY2008 and expects to deliver another set of good results.
"Prospects going forward remain good for the dry bulk sector but is expected to be soft for the tanker market," it said.