Gulf Navigation Holding, one of the only shipping companies listed on the Dubai Financial Market (DFM), has announced a relatively disappointing set of financial results for the first half of 2018. The Group recorded losses of AED 14.76 (US$ 4.02) million, compared to profits of AED 19.03 (US$5.18) million during the same period last year.
Commenting on the loss-making figures, the company said they are primarily the result of a series of ‘one off’ factors, including the final settlement of the company’s last legal dispute with a Chinese company, which had its origins prior to the time of the current administration. Gulf Navigation says it settled the case by paying US$8 million against the US$19 million that was due.
The company also put two petrochemical tankers into drydock for mandatory five-year maintenance work during this period. This scope of work included major upgrades to the two carriers designed to enhance the company’s competitiveness in global markets. The cost of this work, and the loss of the two ships’ charter revenues during the maintenance period, were also contributory factors behind the losses sustained by the company in the second quarter.
Commenting on the results, Khamis Juma Buamim, Board Member, Managing Director and Group CEO of Gulf Navigation Holding, said, “Although our financial records show losses in this quarter, this is a necessary step for achieving future gains and will open the door for major achievements in the coming years. One of the most important achievements was to end the legal dispute a Chinese company that dates back to 2014. Another important investment expense, for which we have allocated a substantial amount of the company’s revenues in this quarter, is the quality upgrade of our ships. We have installed gas exhaust pumps to reduce sulphur emissions and added advanced equipment to treat ballast water to prevent biological pollution. This will help our vessels comply with IMO standards and give us a competitive advantage to get new contracts in established markets such as the European Union and North America.”
Gulf Navigation has also installed advanced engine fans on the two vessels and these are expected to reduce fuel consumption by 5%. “Taking this step now helps us avoid having to use higher-priced, less-available low sulphur fuels, thereby risking higher operating costs and the possibility of our vessels having to stop and not generate revenues while waiting for fuel,” adds Buamim.