Marine transportation company Gulf Navigation Holding on Sunday reported an 85 per cent drop in its first quarter profit this year as weak shipping industry conditions affected its performance.
The company reported a Dh6.4 million profit for the January-March period compared with Dh44.7 million in the same quarter a year earlier.
Revenues declined to Dh81.9 million from Dh94.8 million for the first quarter of 2008.
Abdullah Al Shuraim, the company's chairman, said the first quarter "has been very tough and challenging". Gulf Navigation had witnessed "extraordinary conditions" in the last six months with the decline in ship chartering business, he added.
The shipping industry has been hit hard by the global economic downturn, resulting in a sharp drop in cargo volumes and forcing some out of business. Tanker chartering rates have halved since the second quarter of last year.
Denmark-based Atlas Shipping, which had four Gulf Navigation tankers on long-term charter, filed for bankruptcy in December.
"The global downturn has affected their profits because of the [lower] chartering movements and transportation. The fact that they had two of their ships under maintenance, [and] that took longer than expected, affected their bottom line," said Hesham Bakry of Dubai-based brokerage firm Al Futtaim HC.
The company's shares fell 1.47 per cent to Dh0.68 in yesterday's trading on the Dubai Financial Market.
Gulf Navigation's operating fleet comprises 13 tankers and four crew boats, with two tankers due to join it later this year.
In the first quarter, two tankers joined the fleet and were delivered to International Shipping Company, a subsidiary of Saudi Basic Industries Corporation, on a 15-year time charter.
Long-term chartering contracts account for more than 50 per cent of the company's fleet.
Al Shuraim said in a statement he remains optimistic about business growth as the shipping market has "always been cyclical".
"We are cautiously optimistic about the outlook for the coming months, in spite of the disappointments of the last six months; we believe that we can now draw a line against the past, and we are keenly looking forward to the future," Al Shuraim said.
The company reported a Dh6.4 million profit for the January-March period compared with Dh44.7 million in the same quarter a year earlier.
Revenues declined to Dh81.9 million from Dh94.8 million for the first quarter of 2008.
Abdullah Al Shuraim, the company's chairman, said the first quarter "has been very tough and challenging". Gulf Navigation had witnessed "extraordinary conditions" in the last six months with the decline in ship chartering business, he added.
The shipping industry has been hit hard by the global economic downturn, resulting in a sharp drop in cargo volumes and forcing some out of business. Tanker chartering rates have halved since the second quarter of last year.
Denmark-based Atlas Shipping, which had four Gulf Navigation tankers on long-term charter, filed for bankruptcy in December.
"The global downturn has affected their profits because of the [lower] chartering movements and transportation. The fact that they had two of their ships under maintenance, [and] that took longer than expected, affected their bottom line," said Hesham Bakry of Dubai-based brokerage firm Al Futtaim HC.
The company's shares fell 1.47 per cent to Dh0.68 in yesterday's trading on the Dubai Financial Market.
Gulf Navigation's operating fleet comprises 13 tankers and four crew boats, with two tankers due to join it later this year.
In the first quarter, two tankers joined the fleet and were delivered to International Shipping Company, a subsidiary of Saudi Basic Industries Corporation, on a 15-year time charter.
Long-term chartering contracts account for more than 50 per cent of the company's fleet.
Al Shuraim said in a statement he remains optimistic about business growth as the shipping market has "always been cyclical".
"We are cautiously optimistic about the outlook for the coming months, in spite of the disappointments of the last six months; we believe that we can now draw a line against the past, and we are keenly looking forward to the future," Al Shuraim said.