Marine & General sells another vessel, to reinvest in new chemical tankers

TheEdge Tue, Mar 26, 2024 06:54pm - 2 months View Original


KUALA LUMPUR (March 26): Marine & General Bhd (M&G) sold its oil products tanker, JM Sutera 5, to Kalianda Permata Transport Pte Ltd for US$5.55 million (about RM26.21 million), to partly finance its fleet optimisation strategy.

M&G, which owns 70% in vessel operator Jasa Merin (M) Sdn Bhd, said the cost of investment for the 16-year-old JM Sutera 5 — built in 2008 — was US$5.42 million, with the net carrying value recorded at US$4.36 million.

The group intends to “reinvest in new chemical tankers to renew its vessel fleet,” the marine logistics services provider said in a stock exchange filing on Tuesday.

"Actual decision on the reinvestment will be dependent on market demand and charterer requirements,” it said.

The group had in December last year disposed of another vessel, JM Sutera 7, for US$5.8 million (around RM27.2 million at the time) to Narsimhaa Shipping Inc Liberia.  

As at Jan 31, 2024, M&G’s cash and bank balances stood at RM44.57 million, with short-term borrowings at RM83.03 million and long-term borrowings at RM559.81 million.

For the nine-month period ended Jan 31, 2024 (9MFY2024), M&G’s net profit nearly doubled to RM28.91 million from RM14.81 million in the previous corresponding period, while revenue grew 15% to RM264.86 million from RM231.12 million.

M&G said the improvement in its financial performances were attributable to higher fleet utilisation and charter rates for offshore vessels, in line with the continued increase in oil drilling activities and the general economic recovery in the region.

The group expects vessel utilisation and charter rate increase to continue in FY2024, although at a slower rate than FY2023.

“In relation to the downstream division, all the operating vessels are currently on time-charter contracts. In addition, the division is looking at fleet optimisation measures to achieve better utilisation moving forward,” it said.

“The board continues to be cautious about the potential economic disruption brought about by the geo-political instability in Europe and Middle East that could affect the regional and domestic economic climate. 

“In view of the foregoing, the board is cautiously optimistic about the prospects for the current financial year,” it added.

Shares of M&G, which climbed 35% month-to-date, closed half sen or 1.9% higher at 27 sen on Tuesday, giving it a market capitalisation of RM195.45 million.

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