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Cash-flushed
Malaysia International Shipping
Corporation Bhd, who’s sheer
financial strength is already the
envy of many shipping lines (with
a debt equity ratio of 0.66), is
now embarked on a massive but
meticulously planned expansion
programme that could further
propel the line to top league
world shipping lines.
An
important part of the expansion
plan of the shipping line, which
last year posted 25 per cent
increase in its pre-tax profit
totaling RM1.43 billion (on a
turnover of RM5.85 billion)
includes the acquisition of four
new 7,200 TEUs capacity
containerships.
The
ships are estimated cost of more
than RM1 billion.
Aside
from strengthening its LNG fleet
– the bedrock of its revenue
stream – MISC’s decision to
expand its liner shipping
operation is seen as most
significant and strategic as it
will benefit key national trades
in which MISC is now engaged in.
The
ordering of the four 7,200 TEUs
capacity ships not only comes in
the wake of dramatic improvements
recorded by the shipping line
recently but also in response to
the need to keep its share of the
trade in one of the world’s
largest shipping alliance – the
new Grand Alliance - comprising
P&O Nedlloyd, Orient Overseas
Container Line, Hapag Lloyd and
Nippon Yusen Kaisha.
Although
the improvement in the liner trade
is expected to be short-lived on
account of a global slow-down in
trade, the decision by MISC to
order the new generation
containerships is seen as a
pre-emptive move to prevent an
erosion of its share in the highly
competitive global liner market.
"The
new acquisitions (of the four
container ships) are important as
the liner sector is the second
largest component which and
contributes about RM2 billion or
35.4 per cent of the total revenue
of the corporation totalling
RM5.85 billion,” said MISC’s
chief executive/managing director,
Datuk Hj Mohd Ali Hj Yasin.
Largely
on the back of the improvements in
the liner trade (brought about by
increasing freight rates,
especially in the Asia-Europe
trades) MISC enhanced its
performance for the financial year
ended 31 December 2001.
The
corporation recorded further
improvement in its financial
performance as reflected in the
first quarter results which saw
the pre-tax profit rising to RM357
million (from RM250 million the
same quarter last year).
Datuk
Mohd Ali said overcapacity and the
slowing down of the US and
Japanese economy may, dampen the
performance of the sector in
current year.
“However
we are confident of retaining the
profit before tax of RM1.3 billion
which contributed by shipping
sector in coming year," he
said.
The
injection of four new carriers
with some 28,800 TEUs in the
Asia-Europe trade will further
strengthen the share of the slots
for national carrier in the New
Grand Alliance.
Currently
MISC owns 5 per cent of the global
market share and 12 per cent of
the Asia-Europe trade share in the
consortium.
Ali
said the shipping corporation
would also be looking at
chartering vessels to supplement
its tonnage requirements.
He
also said the shipping line would
be consolidating and streamlining
its liner logistics business by
offering point to point service.
“We
have started to integrate our
warehousing, haulage and agency
business from our domestic
operation to regional and
globally," Ali said.
Meanwhile
MISC, which is the single biggest
owner and operator of LNG with 13
LNG carriers, will be taking
delivery of its five 137,000 cu
metre LNG tankers from Mitsubishi
Heavy Industries Co Ltd and Mitsui
Shipping & Engineering in
Japan in stages from middle of
next year.
The
option for another tankers is
expected to be decided by middle
of this year.
Ali
said the full deployment of these
carriers is expected to further
enhance the contributions of the
LNG sector from RM2.4 billion, or
40.1 per cent of the group's
revenue in the financial period
ended 31 March 2001.
The
shipping corporation is also
looking to expand tankers sector,
as the tanker market remain
positive over next couple of
years.
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