In a welcome boost to its fortunes, Dubai-based Gulf Navigation reported a 43 % increase in profitability over the first six months of 2016. The shipping company, which operates a fleet of chemical tankers, achieved a profit of Dh14.36 million (US$ 3.91 million) in the six months to June 30, 2016, compared to Dh10.04 million (US$ 2.73 million) in the equivalent period of 2015. Revenues rose by 6% in this period as well.
In the second quarter of 2016, there was a particularly strong upward trend, with profits rising by 57%, to Dh8.02 million (US$ 2.18 million), on turnover similar to the same three months last year.
While the company is making progress in terms of financial performance it is understood that it remains in breach of a number of covenants with lenders. Gulf Navigation is likely as a result to seek external debt financing or additional equity. It is reported that the company is considering the issuance of mandatory convertible bonds as part of its refinancing strategy.
Former Drydocks World chairman H.E. Khamis Buamim was appointed as managing director and group chief executive in the second quarter. He is tasked with leading the company’s recovery and this is likely to include diversification into new business areas. Senior management at the company has already been restructured.