Malaysia-listed bunkering firm Straits Inter Logistics (Straits) on Friday (23 August) posted a 166% increase in net profit for the quarter ended 30 June (Q2) of 2019 due to increased business activities.
It recorded net profit of RM 1.8 million in Q2 2019, an increase from net profit of RM 683,000 during Q2 2018.
Revenue during Q2 2019 was RM 125 million, a 183% increase from revenue of RM 44 million during the similar period last year.
Specifically, the company’s oil trading & bunkering services segment posted revenue of RM 124 million in Q2 2019.
“In line with the Group’s plan to build its sustainable revenue stream consisting of oil bunkering and trading in oil products, it has managed to almost doubled up its revenue for the second quarter of 2019 by RM81.03 million to RM125.22 million, from RM44.20 million achieved in the second quarter of 2018,” it stated.
“The substantial jump in revenue is mainly due to the consolidation of the results of Tumpuan Megah Development Sdn Bhd (Tumpuan Megah).
“For the second quarter of 2019, the revenue increased by RM16.47 million or 15.1% to RM125.22 million, from RM108.76 million achieved in the preceding quarter, as the Company commenced its MFO bunkering and increased its bunkering operation as the monsoon and festive season ended in the first quarter.
“The pick up in the oil and gas industry has also contributed to increase in demand for the bunkering business.”
Straits recently completed a 55.0% equity stake in Tumpuan Megah and 38.0% equity stake in Banle, which comes with a Profit After Tax Guarantee per annum of RM5.00 million and USD 0.83 million respectively for the financial year ending (FYE) 31 December 2019 and 31 December 2020.
“With this expanded Group business infrastructure, the Group is poised to exploit its positive mid-term prospects,” it says.
Straits, through subsidiary Tumpuan Megah, on 26 June entered into a provision of bunkering services agreement with Bintulu Port Sdn Bhd (BPSB) for a contract period of three years commencing from 1 August 2019.
In line with the Group’s business strategy to further expand its bunkering services and supply of marine fuel oil (MFO), Straits on 14 June enlarged its asset base through SMF Begonia Ltd, a wholly-owned subsidiary company of Straits Marine Fuel & Energy Sdn Bhd (SMF) by acquiring a vessel named M.T. Antlia (subsequently renamed to M.T. SMF Begonia) for a purchase consideration of USD 4.70 million.
The company on 23 April 2019, incorporated a 51.0% subsidiary known as Straits Marine Services Pte Ltd (SMS) in Singapore to provide in-house vessel and marine management services to the Group’s fleet of vessels, which was previously outsourced to external parties.
The Board of Directors is of the opinion that it would be more cost efficient and beneficial to set up its own vessel management services division under the direct supervision of its Executive Director, Captain Tony who will oversee and ensure that the vessels overall operations and maintenance cost are effectively managed at a very competitive level.
On 6 May 2019, the Group had entered into a Heads of Agreement (HOA) with Elsa Energy Sdn Bhd (Elsa) to facilitate negotiations and collaborations as well as to explore potential acquisition opportunities between Straits and Elsa.
“With the completion of the above acquisitions and new business activities, the Group’s outlook for 2019 continue to look positive,” it concludes.
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Published: 26 August, 2019
