The severe disruptions caused to the shipping industry by the pandemic and higher finance costs keep burdening Gulf Navigation's bottom-line. Image Credit: Supplied

Dubai: Dubai-headquartered Gulf Navigation recorded losses of Dh2.45 million for the first six months of 2022, burdened by a Dh4.27 million net loss sustained in the April-June phase. This adds to the company’s accumulated losses, now at Dh671.44 million, or 65.9 per cent as a percentage of capital.

The vessel operator says it’s revenues are still suffering from the after-effects of the pandemic on global shipping. Another reason is the ‘higher net finance cost’ and the write-off from one of its GL 1 vessels sinking.

The company has been working on solutions since the nadir of 2020. The latest move was to refinance five of its petrochemical tankers at more favourable rates with a Chinese financial leasing heavyweight.

Also, ‘The Group is stabilising the vessels’ performance by taking necessary measures to overcome pandemic challenges,” said a statement. Another step was to charter ships with ‘trusted clients on long-term basis and ‘existing unprofitable business sectors’.

Revenue-side, Gulf Navigation reported H1-22 numbers of Dh72.34 million, a fairly decent increase on the Dh62.42 million last year.

Meeting the financial challenges?

But a lot more needs to go in the company’s favour. “While the Board of Directors are considering all options to reinforce the capital structure of the Group and are in active discussions with its lenders, the timing and realisation of a number of key assumptions within the forecasts are not within management’s control and require the successful negotiations with the Group’s lenders,” the company’s external auditor has noted.

The Group’s current liabilities exceeds assets by Dh280.68 million as against end December’s total of Dh127.87 million.