Gulf Navigation reports Dh3.1m second quarter profit

Gulf Navigation dismissed a string of woes on Sunday, reporting a second consecutive quarter of profits partly thanks to a decline in operating and finance costs.

The company announced a profit of Dh3.1 million for the three months ending June 30, compared to a Dh10 million loss for the second quarter last year. For the first six months of 2014, profits stand at Dh3.6 million, compared to a Dh29.6 million loss for the first half last year.

While operating revenues declined by 22.75 per cent in the second quarter, Gulf Navigation decreased operating costs by 35.9 per cent and net finance costs by 87.38 per cent.

The savings follow Gulf Navigation’s first quarter exit from the crude oil shipping sector in February when it sold two oil tankers for $98 million (Dh360 million).

In 2013, crude oil operations had dragged down the company’s balance sheet and both vessels were seized by creditors when the company defaulted on a loan.

Managing Director Sandeep Kadwe said on Sunday that the company’s agency division, which has four vessels, had a “reasonable” performance in the second quarter.

Raise capital

The shipping company is bullish on its prospects for 2014 despite a trim profit of Dh539,000 in the first quarter. Kadwe, who expects second quarter profits to be repeated in the third and fourth quarter, said the company will now move to raise $130 million in the next two months.

“We are pretty stable as of now and we are looking to raise finance through monetary convertible bonds,” he said.

Gulf Navigation is looking to international investors to raise the capital, which will be used to expand its fleet of eight chemical tankers. Gulf Navigation recently received approval from the Securities and Commodities Authority to raise its foreign ownership threshold to 49 per cent. The company’s former limit on foreign ownership was 20 per cent.

Gulf Navigation shares closed up 2.14 per cent to Dh0.715 on the Dubai Financial Market on Sunday.
Source: Gulf Navigation