Malaysia’s Straits Inter Logistics says a 31% year on year decrease in Q1 profit before tax was due to losses in its inland transportation and logistics operations, but its revenue growth was buoyed by an increase in its bunkering business due to IMO 2020.
For the first quarter ended 31 March 2020, group revenue rose 141.2% year-on-year to RM262.4 million. The revenue hike was attributed to ‘to more bunkering jobs being secured to provide Low Sulphur Fuel Oil as a result of the implementation [of the] low sulphur cap effective 1 January 2020 by the International Maritime Organization,’ the company said in its financial statement.
Pre-tax profits fell back 31.2% year on year to RM1.8 million, the decline was due to a RM0.7 million loss incurred in the group’s inland transportation and logistics segment as well as an initial start-up cost of RM0.5 million in its port management operations. As previously reported, Straits Inter Logistics company signed a six-year port management services contract with Labuan Port Authority at the beginning of March which will took effect from 1 April.
The company also noted that entry into service of its newly acquired vessel, M/T SMF Ixora, had also boosted supply operations. However, the company acknowledged that the fall in bunker prices earlier this year as a result of the impact of the coronavirus on global energy demand had also adversely affected revenue.
Looking ahead, the group said that although the majority of its activities are considered to be ‘essential operations’, the pandemic ‘may possible have financial implications to the group’.
‘The Board of Directors of the Company are closely monitoring the impact of this pandemic on Group’s result and to ensure appropriate risk mitigating measures are undertaken to preserve value and protect shareholders' interests,’ it said.
