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Bahri’s H1 net profit up 50% to $297m

Bahri’s H1 net profit up 50% to $297m
National Shipping Company of Saudi Arabia (Bahri) has announced a net profit of Saudi Riyals (SAR) 1.116m ($297.59m) for the first half of 2016, a whopping 50% period-on-period increase.  

Bahri attribute the jump from SAR 740.89m in 2015 to an increase in operating revenues following the acquisition of “several” VLCCs and chemical tankers in 2016, higher crude oil transportation spot rates compared to the corresponding period, an uptick in performance from its general cargo division as well as a decrease in average bunker prices.

Net profit for the three months to June 30 was SAR 504.18m ($134.44m), an similarly impressive 47.2% surge on the SR 342.48m net profit from Q2 2015.

The same factors that contributed to the half year net profit where in play in Q2 although Bahri also noted a SAR 29.5m increase in its profit share from Petredec Limited. Petredec, 30.3% owned by Bahri, contributed SAR 38.8m in Q2 compared to SAR 9.3m in the corresponding period last year.

The only blip reported was a 17.62% dip in net profit in Q2 compared to Q1, down from SAR 611.99m in Q1 and blamed on a quarter-on-quarter decrease in Time Charter Equivalent (TCE) rate in the crude oil transportation spot market.

“On the other hand, the net income of [Bahri’s] chemicals sector has improved due to the increase in average rates of the chemicals spot market as well as the net income of the general cargo sector due to enhancing the efficiency,” Bahri said in a statement.

Bahri, the exclusive oil-shipper for Saudi Aramco, said that its tanker fleet now stood at 83 vessels, 36 VLCCs and 31 chemical tankers.

It is bullishly eyeing the world’s largest VLCC fleet by 2018. It has 10 more due for delivery from Hyundai Samho Heavy Industries in South Korea in 2017-18 and recently signed a deal with Arab Petroleum Investments Corp (Apicorp) to launch a $1.5bn investment fund for the purchase of up to 15 more.

Some of the newbuilds will replace existing vessels but Naser al-Addulkareem, president of Bahri’s oil sector, has said the Saudi carrier is aiming to increase its VLCC fleet to 46 by Q4 of 2018.

“Oil prices are one thing but the oil demand keep growings, so we have a great opportunity to capitalise on the business,” al-Addulkareem told Reuters.