Dubai: The future of Dubai-based shipping company Gulf Navigation is unclear despite it posting a 101 per cent rise in full-year profit on Sunday.
On Sunday, Gulf Navigation said it made Dh20.17 million in the 12 months to December 31,2015 compared to Dh10.02 million a year earlier. Revenue rose 12 per cent to Dh143.18 million.
The company’s liabilities were Dh616.6 million as of December 31, 2015, a “breach of specified covenants with its lenders,” according to its latest financial statement, posted to the Dubai Financial Market (DFM).
“The ability of the group to continue as a going concern is reliant upon continued availability of external debt financing and/or additional equity and the group’s ability to reverse or mitigate the impact of adverse arbitration awards through legal defence and/or negotiations,” according to the statement.
The company has faced numerous legal challenges including having its vessels seized in recent years as its losses increased. As of December its accumulated losses were Dh242 million.
An increase in the volume of shipping services, marine product sales and distribution business, better chemical tanker spot rates, reduced finance costs and a reduction in off-hires were attributed for the increase.
The company said it “believes that a mutually acceptable arrangement will be reached with all parties [creditors]” and that “one agreement has already been reached with one of the creditors”
Gulf Navigation shares closed up 36 fils to Dh0.82 on the DFM on Sunday.
