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MISC Bhd’s decision to cut by
half its order for eight chemical tankers with
SLS Shipbuilding Co Ltd is considered a smart
move in view of the uncertain demand outlook
this year. MISC had, in July 2007, confirmed an
order for eight 45,000 dead weight tonne (dwt)
chemical or product oil tankers worth a total of
US$430mil with SLS of South Korea. The first
three ships were scheduled for delivery this
year and the remaining five in 2010.
“Following amicable negotiations, MISC and SLS
have come to a mutual agreement on the revision
of orders to the benefit of both parties,” said
MISC said in statement on Monday, without
elaborating.
TA Securities, in a report, viewed positively
the move by MISC to mitigate the risk of the
falling demand in the chemical tanker sector.
“We are not surprised by the news as we have
mentioned in our previous report that the drop
in demand for chemicals, vegetable oils and palm
oil following the global economic downturn will
reduce the demand for chemical carriers,” it
said.
TA said the cut in the orders was also to
prevent further deterioration in the earnings
from the chemical transportation business.
“Despite the 109% surge in revenue, MISC’s
chemical business suffered a loss of RM7.5mil in
the first half of the current financial year
ending March 31.
“The loss was mainly due to higher bunker cost,
coupled with softer freight rates towards the
end of the second quarter. The results were also
somewhat dampened by lower earning days due to
the hijacked Bunga Melati 2 and Bunga Melati 5,”
the report said.
Source: The Star
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