Stocks to watch: Maybulk

Despite almost a halving of charter rates for vessels, Maybulk saw a significant jump in profits for the fourth quarter ended Dec 31, 2009 (4Q09), thanks to improvement in the group's quoted investments and higher contributions from associate companies.

http://www.theedgemalaysia.com/business-news/160134-stocks-to-watch-astro-mas-telekom-maybulk.html 


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Maybulk's profit jumps despite fall in charter rates

Written by The Edge Financial Daily

Monday, 22 February 2010 23:24

KUALA LUMPUR: Despite almost a halving of charter rates for vessels, MALAYSIAN BULK CARRIERS BHD [] (Maybulk) saw a significant jump in profits for the fourth quarter ended Dec 31, 2009 (4Q09), thanks to improvement in the group's quoted investments and higher contributions from associate companies. Maybulk registered a net profit of RM88.4 million, which was a marked improvement compared to RM3.2 million in the corresponding quarter of 2008. The turnover in 4Q was RM82.6 million compared to RM138.1 million in 2008. The vastly improved earnings resulted in improved earnings per share (EPS) of 8.84 sen for 4Q09 compared to 0.32 sen in 2008. The board proposed a final single-tier dividend of 15 sen per share, amounting to RM150 million, for FY09. In the current quarter, the group's other operating income which mainly comprised a reversal of mark to market losses and gains realised from the disposal of quoted investments amounted to RM39.2 million while contributions from associates were RM19.1 million. Both administrative expenses and finance cost were also lower than last year's. Maybulk's associate companies are PACC Offshore Services Holdings Group, Eminence Bulk Carriers Pte Ltd and Novel Bright Assets Ltd. For the year ended Dec 31, 2009, Maybulk posted a net profit of RM243.8 million, a decline of 47% compared to a net profit of RM460.9 million recorded in 2008. This was on a revenue of RM303.7 million in the FY ended Dec 31, 2009 as compared to RM721.2 million in the corresponding period a year earlier. However, the FY08's results included gains from the disposal of four ships of RM327.3 million. In FY09, Maybulk sold its over-aged handy-size bulk carrier Alam Sempurna for a gain of RM8 million. Compared to 3Q09, revenue for the quarter in review was lower at RM82.6 million. In the preceding quarter, revenue was RM98 million. However, this was cushioned by reduced operating expenses of RM43.2 million against 3Q's RM59.1 million. In FY09, Maybulk's performance was affected by a decline in charter rates and its reduced fleet size. Maybulk stated that the Baltic Dry Index (BDI), which is an indicator of the charter rate, was volatile throughout the year resulting in lower comparative average Time Charter Equivalent (TCE) for the drybulk fleet of US$19,076 (RM64,858) per day versus 2008's time charter average of US$37,953 per day. Going forward, Maybulk stated that it will be challenging as indications of increased spending in exploration and production in the oil and gas sector have yet to translate into higher rates due to the current over-supply in the offshore segment.