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Maybulk hit by first ever annual loss of $282m

Maybulk hit by first ever annual loss of $282m
Malaysian Bulk Carriers (Maybulk) said it has posted its first ever annual loss of MYR1.18bn ($282.14m) in 2015, hit by huge impairment provisions as well as operating loss mainly from the dry bulk segment.

The loss of last year was a reversal of fortune from the profit of MYR12.15m in 2014, due mainly to provisions taken in the fourth quarter of 2015.

The provisions included impairment loss on vessels of MYR368.12m, impairment loss on investment in associate of MYR495.77m, and onerous contracts of MYR110.83m. The provisions totalled MYR974.72m.

Furthermore, results were hit by negative contribution from associate PACC Offshore Services Holdings (POSH) of MYR106.18m.

Maybulk’s dry bulk shipping business took a loss of MYR583.11m in 2015 compared to a profit of MYR32.64m in 2014. “In view of the continued deterioration in the dry bulk market, the group wrote down the value of its vessels by MYR368.12m and provided MYR110.83m for estimated losses on its long term chartered-in vessels for the next 18 months,” Maybulk stated.

“2016 is expected to be yet another challenging year for dry bulk shipping,” Maybulk said. “Looking forward, China’s seaborne coal imports are expected to decline further in 2016. The increase in demolition activity, reduced dry bulk deilveries and increasing lay-ups should help to reduce tonnage overcapacity.”

The Kuala Lumpur-listed company also posted a loss of MYR4.33m for its tanker segment last year, as against a gain of MYR659,000 in 2014, due primarily to scheduled docking of the vessels, despite tanker rates improving by 9% to an average of $13,675 per day.