Gulf Navigation profit hit by falling charters

Dubai: Gulf Navigation Holding PJSC, the leading non-state ship owning and maritime services company in the region, has announced its consolidated financial results for the first nine months of 2009.

During the period, the company recorded a net profit of Dh11.62 million compared to Dh136.9 million for the same period in 2008. Revenues declined to Dh255.46 million versus Dh306.45 million, with operating profit of Dh101.62 million against Dh189.85 million.

The company's total assets as of September 30 stood at Dh2.954 billion compared to Dh3.038 billion as at the end of last year.

Lawsuit

Commenting on the results, Engineer Abdullah Al Shuraim, chairman, said: "During the last quarter, the company has continued to confront the major challenges facing the shipping industry worldwide and in spite of the difficulties, has managed to generate positive cash flows and a positive bottom line.

The loss of certain time charter contracts due to charterers being unable to fulfil their contractual commitments forced the company to place some vessels on the spot market.

"However, the company has filed a lawsuit of $52 million (Dh190.94 million) of charter due for the remainder of the contract and is expected to obtain a good portion of that amount after the competent court's verdict is issued, which will certainly improve the company's results in the future.

"The company's strategy is to focus on improving vessel performance, expanding its fleet at the right values, reducing costs and internally strengthening the organisation to capitalise on the future upturn which will ultimately follow. These measures along with the strong balance sheet will position the company to perform better in the coming years. Existing new building contracts are being reviewed with the aim of strengthening the company's cash position."

Shrinking orders

Per Wistoft, the company's Chief Executive Officer, said, "Our markets are presently seeing a shrinking order book from the shipyards and a subsequent lower than originally projected supply of vessels. This will ultimately lead to better rates and we are working towards positioning the company to take advantage of this situation."

In other business highlights during this quarter, the establishment of an office in Riyadh is well under way with the aim of servicing its Saudi Arabian clients.

Results:  Revenue decline

Dh255m amount recorded in first nine months of 2009

Dh306m amount posted for the same period in 2008