Malaysia-listed Straits Energy Resources Berhad (SER), formerly known as Straits Inter Logistics, on Tuesday (9 May) posted a 43.1% jump in net profit for its financial year (FY) of 2022, which was mainly contributed by its oil bunkering and shipping related services segment.

SER recorded net profit of MYR 6.16 million (USD 1.38 million) in FY 2022 compared to MYR 4.3 million in FY 2021, the company stated in its latest filing.

Revenue for FY 2022 totalled MYR 3.11 billion, an increase of 135.8% from revenue of MYR 1.32 billion in the financial year before.

“The Group achieved another record-breaking year with a revenue of RM3.1 billion, an increase of 135.8% as compared to the previous financial year and this was mainly contributed by the Oil Bunkering and Shipping Related Services segment. All other business segments of the Group also had shown an increase in revenue compared to the previous year,” it said.

“The significant revenue increase in the Oil Bunkering and Shipping Related Services segment was driven by a higher demand in both the marine gas oil (MGO) and very low sulphur fuel oil (VLSFO) from international shipping liners and new market expansion, backed by an overall increase in the global oil prices.”

In May 2022, the Group had successfully completed its maiden STS crude oil transfer operation at Victoria Bay, Labuan. This new business segment contributed RM4.2 million to the Group’s revenue.

SER through its 70% owned subsidiary, Tumpuan Megah Development Sdn Bhd (TMD), own and operate a fleet of 15 vessels that comply with health, safety and environmental standards, ranging from 500 to 7,820 deadweight tonnage (DWT). These vessels operate in inner and outer port limits of various seaports in Malaysia.

Products offered by the Group includes:

• Marine Gas Oil (MGO);
• High Sulphur Fuel Oil (HSFO);
• Very Low Sulphur Fuel Oil (VLSFO);
• Marine Fuel Oil (MFO); and
• Low Sulphur Heavy Fuel Oil (LSHFO).

Over the years, the Group’s has expanded its assets base, strengthen its operational capabilities and broadened its geographical coverage to capture the larger growth opportunities in the oil trading and bunkering sector in both Malaysia and the Asia region.

At present, TMD operates in 19 ports in Malaysia, which include Lumut Port, Pasir Gudang Port, Tanjung Pelepas Port, Johor Bahru Port, Kuantan Port, Kemaman Port, Kuala Terengganu Port, Bintulu Port, Labuan Port and Sapangar Bay Oil Terminal and all of which are licensed under Petroleum Development Act 1974 (PDA Licenses) for its bunkering services.

SER said the growth in revenue for FY2022 was mainly attributed to the numerous strategies undertaken by the management to gain a bigger market share. As a result of a slowing economy activity, there was margin compression during that period as a result of competitive pricing and increased costs from suppliers. The oil trading and bunkering business is characterised by high sales volumes and low margins.

In the fourth quarter of 2022, the Group expanded its oil trading and fuel bunkering services to seagoing liquified natural gas (LNG) vessels within the Labuan waters whereby TMD would provide bunkering and related services to international and domestic vessels passing through the Labuan waters. Its maiden operation involves supplying 4,000 metric tonnes of LSHFO to an LNG tanker. The bunkering service entails the supplying of LSHFO which is not available in Labuan or neighbouring states. This had boosted Labuan’s reputation and image as the new bunkering hub in the region.

SER also stated TMD is aware of the profound changes driven by technological disruption and the emergence of new technologies in the global supply chain.

“As such, TMD has started its programme towards automation and digitalisation. A shift to digitalisation is a tool for optimised bunker business models, greater transparency, cross industry cooperation and the decarbonisation of the O&G industry,” it said.

Related: Victoria STS completes its first-ever STS crude oil transfer off Labuan
Related: Straits Energy Resources and Fendercare Marine to promote Labuan STS services
Related: Straits Inter Logistics undergoes name change to Straits Energy Resources
Related: Tumpuan Megah Development to collaborate with Petronas for bunker deliveries
Related: Straits Inter Logistics receives government approval to develop STS hub
Related: Straits Inter Logistics subsidiary to become STS operator at Victoria Bay, Labuan
Related: Malaysia: Straits Inter Logistics gears up for USD 3.6 million STS hub project
Related: Malaysia: Straits Inter Logistics posts 26% rise on year in profit for Q1 2021
Related: Malaysia: Strait’s unit Victoria STS completes first-ever STS LNG transfer in Labuan

Photo credit: Straits Energy Resources Berhad
Published: 10 May, 2023