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Malaysian Bulk Carriers Bhd (Maybulk) posted a
significant improvement in its second quarter
ended June 30 against its first quarter, in line
with the uptrend in the Baltic Dry Index (BDI).
Year-on-year, its second quarter net profit
slumped 68% to RM71.1mil This was because its
second quarter 2008 profit rode on the back of a
high BDI, which in turn was driven by China’s
frenzied imports of commodities prior to the
Olympics that year.
Shipping rates had started to collapse in the
fourth quarter of last year due to the global
economic meltdown.
The BDI reached its all-time high of 11,793
points on May 20, 2008.On average, the BDI in
the second quarter was down by 72.2% to 2,714
points from a year earlier. But,
quarter-on-quarter, the BDI had jumped 73.4%.
The BDI is a measure of shipping costs for
commodities, with coal and iron ore accounting
for almost 50% of commodities shipped on
dry-bulk vessels.
Dry-bulk vessels currently make up almost 40% of
the world’s merchant fleet.
According to an AmResearch report, Maybulk’s
recent results were within expectation with a
core net profit of RM40mil in the second
quarter, bringing first half core earnings to
RM70mil.
“Sequentially, core earnings rose 36%. Average
dry bulk charter rates rose 43%
quarter-on-quarter to an estimated US$16,839 per
day while hire days increased 2% to 906 days,”
it said.
The report said Maybulk’s dry bulk capacity was
equally divided between spot and time charters,
giving it a good balance in riding on a
potential upside in spot rates and secure
profitable charter rates for its time charters.
But Kenanga Research said Maybulk’s half year
results were still below expectations despite
the significant improvement in bulk rates.
“First half core net profit of RM61.5mil
accounted only 39.5% of our forecast and 40.4%
of consensus.
“Our core net profit excludes RM4.6mil forex
gain, RM11.7mil investment gain and RM8mil gain
on vessel disposal,” it said.
Going forward, Kenanga Research said the
shipping outlook remained challenging as China’s
commodity imports were unlikely to continue
while bulk rates would likely stay volatile.
“As recent vessel prices are still holding
despite depressed rates, Maybulk is not in a
hurry for acquisition as yet,” it added.
Maybulk currently owns eight dry bulk vessels
exclusive of charter-in and joint-venture
vessels.
AmResearch noted that Maybulk’s tanker segment
had offset improvements seen in the dry bulk
sector.
“Average tanker rates were down 18%
quarter-on-quarter to an estimated US$15,679 per
day, despite hire days rising by 6% to 244 days.
“The tanker division accounts for 23% of
Maybulk’s total revenue, with the bulk of the
remaining portion still coming from the dry bulk
segment,” it said.
On the earnings contribution from Maybulk’s oil
and gas offshore services via 22%-owned PACC
Offshore Services Holdings Pte Ltd (POSH),
Kenanga Research said while POSH’s second
quarter performance was sequentially weaker, its
performance was more stable compared with the
group’s dry bulk operations.
“POSH’s management expects exploration and
production activities to pick up only in the
second half of 2010 as most oil majors continue
to review capex spending.
“Its young fleet of 70 vessels, with average age
of under five years, will expand to 123 by
2012,” it said.
POSH contributed RM38.4mil to Maybulk’s profit
in the second quarter.
Source: The Star
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