Dubai, 14 Feb. 2011 (WAM) - Gulf Navigation Holding PJSC, one of the maritime and shipping companies in the region, announces today its new 5-Year Plan which calls for the addition of 3 Very Large Crude Carriers (VLCC) of 2 million barrels each in a new company in Saudi Arabia capitalized at SR1.66bn.
The Company adjusted the book values of its 6 PROBOS in preparation for sale, and, as a result, realized a net loss of AED236.77m in 2010. Two of the new VLCC tankers, which will be delivered in 2012 and 2013, have 10-year charter contracts worth AED1.05bn ($284.7m). The third ship, named Gulf Eyadah, was delivered to Gulf Navigation on January 26, 2011 and started its 2-year contract worth AED93.8m ($25.6m) last month. The 3 Very Large Crude Carriers, in addition to a fourth already operated by the Company, will form the fleet of a new Gulf Navigation subsidiary in Riyadh. The Saudi company, which is under processing, is majority owned and controlled by Gulf Navigation with the remaining for Gulf shareholders. Capital of the company will be SR1.66bn ($443.2m) and is intended to go public when authorized. The Kingdom was selected due to its stature in the crude oil market as the world's biggest exporter and user of VLCC tankers. Gulf Navigation will sell the 6 Probo ships to avoid future losses, as indicated by its own studies. The decision resulted in accounting for a book loss of AED248.94m for the year ending December 31, 2010. The figure includes a market value loss of AED174.5m, Goodwill write-down of AED36.24m and operating losses of AED38.2m. The Probo ships contributed to the Company's profitability until 2009 with AED645.37m in revenue and 14.22% in average annual return. Other business units have generated a net profit of AED12.17m during the year 2010. Gulf Navigation's cash flow remained strong in 2010 with Operating Profits before depreciation and interest of AED103.1m, compared to AED147.18m in 2009. Revenue stood at AED312.98m in 2010, compared to AED338.16m in 2009 due to low freight rates during the year. Company's Net Profit in 2009 was AED26.55m. Commenting on the results, Eng. Abdullah Al Shuraim, Chairman of Gulf Navigation Holding said " Our 5-Year Plan reflects a forward-thinking strategy that will take Gulf Navigation Holdings to a heightened level of global competitiveness. We have multiplied our crude carrying capacity four times to equal the crude export of Saudi Arabia for one day. We also plan to increase the VLCC fleet to 9 ships by the year 2015, a capacity of 18 million barrels." Eng. Al Shuraim added:"The decision to impair the Probo ships was difficult for the Board since we and our shareholders are used to profit figures since inception. But we unanimously decided to be pro-active in exchange for future profitability beginning 2011, healthier cash flow to support our growth in crude and liquid chemical transport, and modernizing our fleet."Copyright Emirates News Agency (WAM) 2011.
