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Hubline Berhad, a regional liner shipping
specialist, has taken a strategic move to enter
the bulk shipping sector by acquiring the entire
stake in Highline Shipping Sdn Bhd.
Hubline will pay RM192.87 million for the
acquisition of Highline Shipping that will pave
the way for the shipping line to engage in bulk
shipping mainly in the transportation of dry
cargo shipments, which include the carriage of
iron ores, coal, gypsum and heavy machineries.
“The acquisition diversifies our earnings from
liner shipping business and also expands the
total fleet of our group from 24 ships to 43
ships, or an addition 19 bulkers,” said the
group managing director, Dennis Ling.
He is confident that the company could post
better earnings this year due to the higher
profit margin for the bulk business.
Bulk transportation rates are high and the
profit margins are better because of the nature
of the business which does not have specific
trade routes or schedules to follow.
Hubline recorded a net profit of RM26.4mil on
the back of RM387.5mil in revenue last year.
Hubline acquired 50.23 per cent of Highline
early this year for RM86.6 million and made
second attempt to acquire the remaining 49.77
per cent in the Highline Shipping early this
month.
The company has entered into a conditional sales
and purchase agreement with Many Plus Holdings
Sdn Bhd to acquire the remaining 8,174,818
ordinary shares of RM1.00 each for a total
consideration of RM106.27 million or RM13.00 per
Sale Share.
The acquisition will reduce the company’s
earnings dependence on the liner shipping which
contributed RM387 million in 2006 financial
period.
Hubline specialize in the liner trade over the
last 15 years with a fleet of 24 vessels with a
total carrying capacity of over 12,000 TEUs in
the intra-Asian trade.
Recently the shipping line announced that it
planned to use Sepangar Bay at Kota Kinabalu
Port as its base port to foster transshipment in
the liner trade linking the Sabah port with
several ports in the region.
Denis said the entry into bulk shipping was
timely and strategic move for the group as it
has an extensive network of more than 70 agents
around the world.
“This allows us to position our bulk shipping
services well for Malaysian ports, Intra-Asian
ports and other regional markets which include
China, Hong Kong, Korea, Myanmar, and the Indian
sub-continent, Cambodia, Japan, Indonesia,
Australia and Philippines,” he said.
Besides the 17 ships from Highline Shipping,
Hublilne has taken delivery of two bulkers from
the yard early October this year and it will be
taking delivery of four more bulk ships by first
quarter of 2008.
The enlarged Hubline Group activities in bulk
shipping will also benefit from the synergies to
be derived from the businesses in terms of fleet
management and cost savings, said Dennis. |
