DOHA: Global fall in prices of ships has created a golden opportunity for Qatar Shipping Company (Q-Ship) to expand its fleet by buying ships, said officials.
In the light of the global financial meltdown, prices of ships have fallen by 50 percent since 2008 and ocean freight rates have fallen by up to 95 percent, said K K Kothari, Q-Ship's Chief Executive Officer.
He was speaking at a shareholders meeting held yesterday at the Doha Marriott for discussing Q-Ship's half yearly results.
The event was attended by Q-Ship's Chairman, Salem Butti Al Naimi, shareholders and the media.
The crisis has created diverse opportunity for the company to expand by buying more ships, he said.
"We expect prices of vessels to fall further and we will choose the right time for buying ships. The company had sold half of its fleet for some QR670m at the peak of the market. The same vessels that the company sold can be bought at half of the selling price," said Kothari.
About Q-Ship's chartering activity, he said most of the vessels are leased on a time charter basis and this gives the company additional gain compared to spot lease.
The latest charter deal was signed with Bharat Petroleum Corporation (BPCL), an agreement for the time charter of the tanker UMLMA, which is fully owned and operated by Q-ship. On this time charter, the tanker will be used for the transport of crude from the Arabian Gulf, including Qatar, to India.
Asked about Q-Ships decision to sell one of its subsidiaries, Qatar Construction (Q-Con), he said the objective of selling Q-Con is for focusing on shipping activity.
As for the process of the proposed merger between Qatar Navigation QSC and Q-Shipping yesterday, Al Naimi said the process in on track and the appointed Steering Committee is currently carrying out the evaluation process of the two companies.
The company's net income in the first half of the year was QR158.58m, down from QR375.03m in the same period last year, when it booked a one-time QR114m gain on the sale of a vessel.
The shipper, which owns and runs a fleet of vessels operating in sectors including crude oil, petrochemicals and liquefied petroleum gas, did not give a breakdown of its second quarter results.
Excluding the sale, first half profits fell 39 percent as the firm posted a loss on investments of about QR17m from a QR76.9m profit in 2008.
It posted a first quarter net profit of QR77.7m and a profit of QR173.73m in the second quarter of 2008.
© The Peninsula 2009
