Maybulk’s 1Q bottomline lower on absence of one-off gain, but operating profit jumps

Malaysian Bulk Carriers Bhd (Maybulk) net profit for the first quarter ended March 31, 2021 (FY21) fell 68.51% to RM15 million from RM47.65 million in the corresponding quarter last year, when it recorded a one-off gain on the liquidation of a subsidiary.

Quarterly earnings per share fell to 1.5 sen from 4.77 sen, the company’s results filing showed.

Operating profit, however, jumped over 400% to RM18.61 million from RM3.17 million, on the back of higher charter rates, lower vessel operating expenses, and redelivery of two loss-making chartered-in vessels, it said.

During the period, the group’s average time charter equivalent rose 41.12% to US$12,860 per day from US$9,108 per day the year before.

Quarterly revenue fell 10.82% to RM46.62 million from RM52.27 million but the group benefited from a 65% decline in lower voyage expenses to RM4.91 million, from RM14.03 million. Hire days fell 28.76% to 748 days from 1,050 days, it said.

On prospects, Maybulk sees the positive situation in the dry bulk segment to be sustained into the second quarter of this year, on strong demand and temporary disruptive elements such as port condensations.

Meanwhile, it expects the high Chinese steel output to come under pressure, as regulators may rein in excess capacity and curb environmental pollution — which may impact iron ore and coal imports.

“The resurgence of Covid-19 infections in the Indian subcontinent and other parts of Asia also present downside earnings risk, increase vessel trading complexities and quarantine risks.

“Consequently, the shipping industry will continue to stay in a volatile trading environment and the path to economic recovery is likely to be uneven in the coming quarters,” it said.

As at March 31, 2021, the group owns and operates eight vessels, with one vessel committed to be sold to a third party for approximately RM56 million. Two of its vessels are under long-term charter, which are scheduled for redelivery in early 2022 and mid 2023, it added.

Maybulk’s share price fell 4 sen or 5.93% to close at 63.5 sen, valuing the group at RM635 million.
Source: The Edge Markets