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Gulf Navigation in the black for the first time since 2010

Gulf Navigation in the black for the first time since 2010
Financially embattled Gulf Navigation has recorded a profit in the first quarter of AED539,000 ($146,746), its first profitable quarter since 2010.

The black ink comes after Gulf Navigation exited the large crude tanker sector last year by selling its two VLCCS for $98m, both of which had been arrested by creditors in 2013. The sale of the Gulf Eyadah and Gulf Sheba saved 40% in operational expenses and 68% in financing expenses in the first quarter 2014, bring operational profit to AED4m from a AED3.8m loss in the same period 2013.

Last August the company was in breach of its loan term agreements and failed to make a payment of $1.86m on its debt. With liabilities mounting and the future of the company at the mercy of its creditors, the company's interim results statement warned, "there exists a material uncertainty which may cast significant doubt on the ability of the group to continue as going concern."

The company's full year loss totalled AED697m in 2013, 89% of which was one-off expenses related to the exit of the VLCC sector, goodwill write-offs and provisions for claims against Gulf Navigation.

Those claims include the case of the Gulf Scandic, which was redelivered to Nordic American Tankers (NAT) in poor condition after a six year bareboat charter to 2010. NAT was awarded $10.2m over the dispute at arbitration earlier this year, an outcome that Gulf Navigation intends to appeal against.