Maybulk Issues Profit Warning
Malaysian Bulk Carriers Bhd (Maybulk) is forecasting significant losses for the fourth quarter of 2015 and the financial year ended December 31, 2015 amid depressed market condition.
Maybulk, which operates the country’s largest fleet of dry bulk vessels used for international shipping, expects to record “a substantial loss” for the fourth quarter (Q4) ended Dec 31, 2015, and for the 2015 financial year (FY15).
In a filing with Bursa Malaysia last Friday, Maybulk said the anticipated substantial loss is mainly attributable to provisions for onerous contracts and impairment of investment in associate company PACC Offshore Services Holdings Ltd (POSH).
"The dry bulk market continues to be weak and it is uncertain when the market will recover," it said in the filing.
On the first provision, Maybulk noted that the dry bulk market continued to be weak and it was uncertain when the market would recover.
“The group has reviewed its non-cancellable operating lease contracts for the chartered-in vessels and based on a preliminary assessment, the charter-in costs are higher than the current and likely market rates. Hence a provision for onerous contracts has to be made,” it explained.
Maybulk had invested S$82.43mil (RM240.15mil) in POSH in 2014 in order to maintain its 21.23% stake in the Singapore-listed company in conjunction with POSH’s initial public offering exercise.