Troubled waters for Dubai-based oil tanker company
Gulf Navigation Holding dipped to a loss of Dh24.83 million (US$6.76m) in the second quarter as the chemical and oil tanking firm struggled to offload vessels from its fleet, it said.
The results, a reversal from earning Dh20.52m in net profits over the second quarter last year, capped a "difficult" time that the company "had to face", said Abdullah al Shuraim, the chairman of Gulf Navigation.
The company, which is based in Dubai and is traded on the Dubai Financial Market, booked losses relating to the declining value of its PROBOS vessels, which are ships that can be used for both chemical and oil tankering. The values for these vessels dropped Dh5.99m, while Gulf Navigation also suffered costs relating to the disposal of these vessels totaling Dh16.55m, and PROBOS trading losses of Dh4.65.
Had it not been for the PROBOS issue, the company would have earned a net profit in the second quarter of Dh2.36m, the company said.
"The removal of the PROBOS fleet, although very difficult, was a necessary step that the company had to take," Mr al Shuraim said. "The further losses incurred in this process were unfortunate but are indicative of the state of play within this market segment."
Updated: August 14, 2011 04:00 AM