Business | Shipping
Gulf Navigation doubles profit, awaits downturn opportunities
Gulf Navigation Holding, a marine transportation company, saw its third-quarter profit more than double despite a slowdown in the shipping sector.
- By Shakir Husain, Staff Reporter
- Published: 23:43 October 29, 2008
Dubai: Gulf Navigation Holding, a marine transportation company, saw its third-quarter profit more than double despite a slowdown in the shipping sector.
Its profit was Dh43.9 million (Dh161.1 million) for the July-September period this year compared with Dh20.5 million for the corresponding quarter in 2007.
It reported a 100 per cent jump in profit to Dh136.9 million for the first nine months of 2008. Its revenues increased by 77 per cent to Dh306.4 million.
"Despite the global econ-omic slowdown that is being felt in all sectors of the market especially in the shipping industry, we have posted impressive earnings and profitability," Gulf Navigation chairman Abdullah Al Shuraim said in a statement to the Dubai Financial Market, where the company is listed.
In an interview with Gulf News, Al Shuraim said the financial market crisis even presents his company with opportunities to acquire businesses in distress and buy new vessels at lower prices.
The company had earlier delayed buying 13 vessels because of high ship prices, but now the prices have declined due to the credit crunch and low material costs.
"We are monitoring the companies that might be having problems with financing. We have an advantage that a lot of other companies may not have. We have access to liquidity and excellent relationship with banks," he said.
The company has Dh700 million in cash ready to invest and with bank borrowings would be able to strike larger deals, Al Shuraim said.
The company's cash and liquid assets are invested in Sharia-compliant short-term products with local and Islamic banks in the UAE and are reserved for the company expansion plans.
The company, which has 14 operating vessels and expects to get delivery of five new oil and chemical product tankers in the coming months, said it bucked the slowdown trend because of the term contracts it has for its vessels.
Gulf Navigation took delivery of Gulf Fanatir and Gulf Huwaylat vessels this summer. The 46,200 deadweight tonnage (DWT) chemical carriers from the Hyundai shipyard in Ulsan in South Korea are chartered to Saudi petrochemicals giant Sabic for 15 years.
Two additional tankers will be delivered to Sabic by the end of 2009.
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