Gulf Navigation returns to profit in Q2 on higher cash flow and lower costs

The company's total assets at the end of June 30 reached $235m

Gulf Navigation's fleet of vessels includes petrochemical tankers, livestock transport ships, and marine support vessels, which allows it to service different markets. Courtesy Gulf Navigation

Dubai-listed maritime and shipping company Gulf Navigation swung to profit in the second quarter of 2021, as costs fell and operational cash flow climbed.

Net profit for the three months to the end of June climbed to Dh125,000 ($34,036), from a loss of Dh33.5 million for the same period last year, it said in a statement on Saturday.

Net profit for the first six months of 2021 also surged to Dh79m, from a net loss of Dh51m recorded a year earlier.

The company's operating profit for the six-month period surged to Dh100m from a loss of Dh27m for the same period in 2020. It operating revenue for the reporting period however, fell 8 per cent to reach Dh62m, while net cash flow reached Dh117m.

Gulf Navigation attributed its return to profitability to “enhancing the cash flows from operating activities, reducing operating costs by 32 per cent ... administrative expenses by 54 per cent, and addressing the majority of outstanding operational and financial matters”, its chairman Sheikh Theyab Al Nahyan said.

Total assets at the end of June 30 stood at Dh863m.

Earlier this year, Gulf Navigation reached an agreement with its lenders on new and flexible terms on its debt, allowing it to adapt to current market conditions.

In April, it restructured its biggest loan of Dh200m with Australis Maritime. The cost of its debt is set to decline 25 per cent, or Dh4m annually, following the arrangement.

The company also paid off its obligations to Abu Dhabi Commercial Bank earlier this year as it sought softer terms with other lenders.

In the second half of the year, the company plans to focus on chartering ships on long-term basis, exiting unprofitable business sectors and ensuring continuity of operations amid continued challenges to the shipping and logistics sector due to the Covid-19 pandemic, Sheikh Theyab said.

“We are also evaluating opportunities available to us for the purpose of increasing our maritime fleet, and entering into several strategic partnerships regionally and globally, which will provide the company with many diverse opportunities and the ability to grow throughout the region,” he added.

Gulf Navigation's fleet of vessels includes petrochemical tankers, livestock transport ships and marine support vessels, which allows it to service different markets.