With oil prices weakening in the past one month, tanker rates are expected to slide further this year, AET Tankers Holdings Sdn Bhd president and chief executive officer Amir Hamzah Azizan said.
He said next year would be a difficult year for the tanker sector, as demand would be easing off while the supply of tankers would be heavy in the market. AET Tankers is a wholly owned subsidiary of MISC Bhd, which is the world’s largest operator of liquefied natural gas (LNG) tankers.
"In the second half of this year, the market would be easing off due to weaker oil prices in the past two weeks," Amir told reporters after MISC’s AGM here yesterday.
Crude oil prices have fallen more than 20% on the New York Mercantile Exchange after reaching a high of US$147.27 (RM493.36) in early July. As at 3.30pm yesterday, oil was trading at US$114.80 (RM384.58) a barrel.
The Baltic Dirty Tanker Index, which tracks the cost of transporting crude oil, has slumped close to 42% of its value to about 1,354 points. Given that the index measures tanker-shipping rates, a dip in prices would be a sign of weakness in the global economy.
Tanker rates have fallen after Saudi Arabia increased the price of its heavy crude for the US, Asian and European buyers for September. This could lead to lower demand for vessels, as refineries would be cutting down on crude oil purchases.
Based on MISC’s recent financial results for its financial year ended March 31, 2008 (FY08), its net profit fell 14.7% to RM2.43 billion from RM2.85 billion previously, despite posting a higher revenue of RM12.96 billion against RM11.2 billion a year earlier.
Meanwhile, MISC announced yesterday that its net profit fell 9.2% to RM522.9 million for its first quarter ended June 30, 2008 from RM575.6 million a year earlier due to weaker container shipping demand as a result of the global economic slowdown.
The company is forecast to post a net profit of RM2.53 billion in the year to March, according to Reuters Estimates, up around 4% from RM2.43 billion in the previous year.
MISC’s chief executive officer Datuk Shamsul Azhar Abbas said: "We have been bracing for a slowdown (tanker rates) over the last two years. While the first and second quarters came up strongly, there would be a dip in the third quarter."
He said the merger between MISC and Ramunia Holdings Bhd would benefit both companies in terms of anticipated increase in capacity. "This would help us with additional acreage and boost space for repair and maintenance facilities."
Early this year, MISC announced a RM3.2 billion reverse takeover deal between Ramunia and MISC’s unit Malaysia Marine & Heavy Engineering Sdn Bhd (MMHE). MISC would sell MMHE to Ramunia in exchange for a substantial stake in Ramunia. As a result, MISC would hold a 72% stake in the offshore engineering group.
He said next year would be a difficult year for the tanker sector, as demand would be easing off while the supply of tankers would be heavy in the market. AET Tankers is a wholly owned subsidiary of MISC Bhd, which is the world’s largest operator of liquefied natural gas (LNG) tankers.
"In the second half of this year, the market would be easing off due to weaker oil prices in the past two weeks," Amir told reporters after MISC’s AGM here yesterday.
Crude oil prices have fallen more than 20% on the New York Mercantile Exchange after reaching a high of US$147.27 (RM493.36) in early July. As at 3.30pm yesterday, oil was trading at US$114.80 (RM384.58) a barrel.
The Baltic Dirty Tanker Index, which tracks the cost of transporting crude oil, has slumped close to 42% of its value to about 1,354 points. Given that the index measures tanker-shipping rates, a dip in prices would be a sign of weakness in the global economy.
Tanker rates have fallen after Saudi Arabia increased the price of its heavy crude for the US, Asian and European buyers for September. This could lead to lower demand for vessels, as refineries would be cutting down on crude oil purchases.
Based on MISC’s recent financial results for its financial year ended March 31, 2008 (FY08), its net profit fell 14.7% to RM2.43 billion from RM2.85 billion previously, despite posting a higher revenue of RM12.96 billion against RM11.2 billion a year earlier.
Meanwhile, MISC announced yesterday that its net profit fell 9.2% to RM522.9 million for its first quarter ended June 30, 2008 from RM575.6 million a year earlier due to weaker container shipping demand as a result of the global economic slowdown.
The company is forecast to post a net profit of RM2.53 billion in the year to March, according to Reuters Estimates, up around 4% from RM2.43 billion in the previous year.
MISC’s chief executive officer Datuk Shamsul Azhar Abbas said: "We have been bracing for a slowdown (tanker rates) over the last two years. While the first and second quarters came up strongly, there would be a dip in the third quarter."
He said the merger between MISC and Ramunia Holdings Bhd would benefit both companies in terms of anticipated increase in capacity. "This would help us with additional acreage and boost space for repair and maintenance facilities."
Early this year, MISC announced a RM3.2 billion reverse takeover deal between Ramunia and MISC’s unit Malaysia Marine & Heavy Engineering Sdn Bhd (MMHE). MISC would sell MMHE to Ramunia in exchange for a substantial stake in Ramunia. As a result, MISC would hold a 72% stake in the offshore engineering group.