Rising operating vessel costs push GulfNav deeper into loss

Dubai-based shipping company Gulf Navigation Holding (GulfNav) closed the third quarter of this year with a widened net loss year over year (YOY).

The company suffered a net loss of AED 18.5 million (USD 5.04 million) during the three-month period ended September 30, 2019, against a net loss of AED 3 million seen in the corresponding quarter a year earlier.

The Q3 results brought the company’s total loss for the first nine months of 2019 to AED 46.3 million, compared to a loss of AED 17.8 million reported in the same nine-month period last year.

As explained, the decline in the company’s financial performance is due to the high operating costs of vessels coupled with lower asset utilization in the quarter.

Operating revenue, on the other hand, rose to AED 44.6 million in Q3 2019 from AED 38.8 million in Q3 2018, representing an increase of 15 percent. What is more, operating revenue for the first three quarters of 2019 went up by 19 percent to AED 130.4 million from AED 110 million recorded in the corresponding period of 2018.

Gulf Navigation also informed it had completed a 10-year special survey and ballast water treatment installation program on its four vessels chartered to SABIC.

After a period of underutilization, GulfNav has now managed to secure spot and long-term charters for all nine vessels.

On cost structure front, the company has restructured its operations and reorganized its subsidiaries to ensure continuity of its operations and enhanced its productivity. Gulf Navigation said it was looking to outsource its ship management function to optimize its cost structure and enhance governance.

“Today, we continue to work on opportunities to drive positive changes through operational and administrative reorganization,” Saeed Mubarak Al Hajeri, Chairman of Gulf Navigation Board, commented.

“We continue to resolve legacy issues and I am confident of achieving operational and financial excellence in the near future. We look forward to wrap up a challenging year on a positive note and prepare ourselves for a positive 2020,” he added.

GulfNav has a fleet of fourteen vessels comprising chemical tankers, livestock carriers, offshore vessels and one well stimulation vessel, the company’s website shows.