Malaysia-listed bunkering firm Straits Inter Logistics (SIL) posted a significant increase in net profit for its financial year ended 31 December 2016 due to diversification into oil bunkering and trading activities.
The company recorded net profit of RM 2.7 million ($690,000) in 2017, representing an increase of 2,606% from net profit of RM 100,000 in 2016, according to its financial statement.
Revenue was RM 134.6 million in 2017, a 96% jump from revenue of RM 68.5 million in 2016.
“Revenue for the fourth quarter of 2017 has increased by RM 18.75 million to RM 51.70 million, from RM 32.95 million achieved in the preceding quarter. This jump in revenue is mainly due to the commencement of its oil bunkering business,” said SIL.
“In the coming financial year, the group will continue to expand its oil trading and bunkering business by increasing its deliverable tonnage capacities through increasing its vessels base by acquisitions of vessels or chartering third parties' vessels, along with strengthening its operational capabilities and broadening its geographical coverage to capture the growth opportunities in the oil bunkering industry in Malaysia and Asia region.”
SIL commenced oil bunkering operations from the Pasir Gudang Port, Johor in the fourth quarter of 2017 through Selatan Bunker, which has earlier secured the Petroleum Development Act Licence (Malaysian bunker supply license) on 5 September 2016.
On 14 September 2017, SIL entered into a six-month contract for service with Labuan-based bunker supplier Tumpuan Megah Development for a contract sum of RM 45 million.
Moving on, SIL says it will continue to assess the demand from its existing and potential customers through continuous marketing activities to increase its oil bunkering activities in 2018.
“Nevertheless, the group’s operations are dependent on the level of activity in the exploration, development and production of oil and natural gas, including the level of capital spending in the offshore oil and gas industry,” it explains.
“Despite the relatively positive outlook for the offshore oil and gas industry, the industry competition is expected to intensify further in view of the rising operating costs and fluctuations in foreign exchange rates.
“The group will continue to take all reasonable steps and precautions to mitigate the impact of rising costs and intensifying market competition.”
Manifold Times earlier reported SIL on 18 January 2018 entering into formal talks with Hong Kong-based bunker trading firm Banle Energy International to explore further business opportunities in the marine fuels sector.
Related: Straits Inter Logistics and Banle Energy explore bunker business opportunities
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Published: 27 February, 2018
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