Gulf Navigation Net Falls 82% as Shipping Rates Drop (Update1)

31/01/2010 00:00 AST

Gulf Navigation Holding PJSC, Dubai’s only publicly traded oil-tanker owner, said full-year profit fell 82 percent as shipping traffic and freight rates declined because of the global economic crisis.

Net income dropped to 26.6 million dirhams ($7.2 million) from 148 million dirhams a year earlier, the company said in a statement to the Dubai bourse today. Sales slumped 15 percent to 338 million dirhams.

The financial crisis hurt the shipping market as demand for goods declined and previous orders for tankers brought too much supply to the market. Freight rates, the amount shippers earn for transporting goods, may improve this year as fewer new ships come to market this year, Gulf Navigation executives have said in the past.

“We look forward to 2010 as a year of expansion,” Chairman Abdullah Al Shuraim said in the statement. “We believe that tanker prices are now more realistic, and combined with our strong cash position, we will be able to expand our fleet to meet the tremendous growth of Gulf chemical and oil production in the beginning of 2012.”

Gulf Navigation has about $150 million in cash and will spend part of that on down payments for four new petrochemical tankers, al Shuraim told reporters Jan. 27 in Dubai. The new vessels will help raise the amount of cargo the company expects to lift by one third this year to 6 million tons, he said.

Gulf Navigation plans to pay a dividend of 30 fils a share and approved a plan to buy back stock this year.

Bloomberg