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Maybulk sees 2014 profit plunge but expanding for future needs

Maybulk sees 2014 profit plunge but expanding for future needs
Kuok Group's Malaysian Bulk Carriers (Maybulk), which saw 2014 net profit fall by 72% to MYR12.2m ($3.4m) is  building five new ships to expand its fleet size to 27 vessels by 2018, local reports said after a media briefing on its results.

The group has set aside some MYR400m for capital expenditure in the next three years for expansion, which will increase Maybulk's tonnage capacity to 1.5m dwt from 1.2m dwt.

“Many shipping companies are increasingly running into financial difficulties due to the bleak outlook in the shipping market, but we remain profitable although at a much lower level,” said Maybulk ceo Kuok Khoon Kuan

.He expects 2015 to be another bleak year for the industry, due to slowing demand in major economies, coupled with continued tonnage overcapacity and the marginal growth in global trade flows.

Signalling a worsening environment, Maybulk turned in a MYR21.8m loss in the fourth quarter from a MYR13.9m gain in the previous corresponding period. With the average time charter equivalent (TCE) for Maybulk's dry bulk and tanker fleet dropping to about $9,400 a day, the dry bulk segment, a core business of Maybulk, widened its loss to MYR48.8m from a loss of MYR25.6m a year ago due to a weaker time charter market compared to charter-in cost, initial expenses for new deliveries of fleets, compliance costs to meet more strict emission standards and a provision for onerous contracts with regards to the charted-in vessels, the company said in a stock market announcement.