Malaysian Bulk Carriers Q2 net more than halves

August 25, 2010



MALAYSIAN Bulk Carriers Bhd (MBC), a shipping group, said its second quarter net profit more than halved due to stock market and foreign exchange losses as well as lower earnings from its associate company.

But the group, controlled by tycoon Robert Kuok, is confident that business will remain good based on its existing contracts.

MBC posted a net profit of RM32.84 million in the second quarter ended June 30 2010, against RM72.45 million a year ago. For the six-month period, its net profit was marginally lower at RM85.84 million, against RM88.5 million in the same period last year.

Revenue jumped 36 per cent to RM96.07 million in the second quarter. It surged 71 per cent to RM123.07 million for the first half period.

The results were slightly below some analysts' expectations.

During the six-month period, it made foreign exchange losses of RM12.6 million, due mainly to the weaker US dollar and some RM13.3 million provisions for the fall in value of quoted investments.

Looking at the group's operations alone - without accounting for its associates, foreign exchange or stock market investments - MBC posted operational profit of RM66.7 million for the six-month period, more than 50 per cent higher than the RM40.9 million in the first half of last year.

The group's business is driven mainly by its dry bulk carriers and tankers. Dry bulk carriers are used mainly to carry unpackaged bulk cargo like grains, coal, ore, and cement. Tankers are used to carry liquid in bulk, like oil and chemicals.

MBC chief executive officer Kuok Khoon Kuan remains optimistic of its outlook for the rest of the year, based on the contracts and jobs for its dry bulk carriers.

"I'm optimistic in terms of the company's operational level. So far, 70-80 per cent of our fleet is already covered for the year," Kuok said at a media and analysts' briefing in Kuala Lumpur yesterday.

It expects the tanker business to remain challenging, due partly to slower oil and gas drilling activities in the US. So far, half of its tanker fleet has been filled up.

MBC's shares on Bursa Malaysia declined 0.34 per cent, or 1 sen, to close at RM2.87 yesterday.