Malaysia: Straits Energy Resources concludes FY2023 with 14.8% jump in net profit

Bursa Malaysia-listed Straits Energy Resources Berhad (SER), formerly known as Straits Inter Logistics, on Friday (3 May) posted a 14.8% jump in net profit for its financial year (FY) of 2023, which was mainly contributed by its oil bunkering and shipping related services segment.

SER recorded net profit of MYR 7.1 million (USD 1.5 million) in FY 2023 compared to MYR 6.2 million in FY 2022, the company stated in its latest filing.

Revenue for FY 2023 totalled MYR 2.9 billion, dropping 6.1% from revenue of MYR 3.1 billion in the financial year before.

The oil bunkering and shipping related services continued to be the main contributor to the Group’s main revenue, representing approximately 98.9% of the Group’s revenue. 

“On the segmental basis, Oil Bunkering & Shipping Related Services Segment is the main contributor to the Group’s revenue which had recorded a drop in revenue approximately of 6.5% which was mainly caused by the drop of 23.5% in overall cargo prices in FY2023 as compared to FY2022 although the cargo volume sold has increased approximately by 16.9%,” the firm said in the Management Discussion and Analysis section of the report. 

“The increase on the cargo volume sold in FY2023 was mainly due to higher demand of both marine gas oil (MGO) and very low sulphur fuel oil (VLSFO) from international shipping liners. The profit before tax for this segment has a marginal increase by RM0.5 million to RM18.6 million.”

In January 2024, SER’s indirect 70%-owned subsidiary, Tumpuan Megah Development Sdn Bhd (TMD), was awarded certification from the International Sustainability and Carbon Certification (ISCC EU) scheme, paving the way for TMD’s entry into the marine biofuel trading and bunkering business in the second quarter of 2024. 

SER said TMD is the first Malaysian industry player to achieve ISCC EU certification as a supplier and trader of biofuels.

On 30 April 2024, SER announced TMD successfully completed a milestone biofuel bunkering operation in Malaysia. The firm believed this was the first delivery of ISCC EU certified marine biofuel by a Malaysian supplier.

On 2 October 2023, the Straits Group announced its intention to spin-off its Oil Bunkering and Shipping Related Services segment for listing on The National Association of Securities Dealers Automated Quotations (NASDAQ) stock exchange in the United States by way of a registered public offering.

As part of the Proposed Listing, Straits currently is the process of re-structuring some of its subsidiaries involved in the Oil Bunkering and Shipping Related Services segment, for the purpose of forming a separate listing group (Spin-Off Group). 

The Proposed Listing is still in progress and the Company will make further announcements as and when applicable.

SER is licensed to operate bunkering and barging operations at 19 Ports i.e Lumut Port, Port Klang, Malacca Port, Johor (Pasir Gudang) Port, Port of Tanjung Pelepas, Tok Bali Port, Kuala Terengganu Port, Dungun Port, Kemanan Kemaman Port, Kuantan Port, Pulau Tioman Port, Desaru, Pengerang, Johor Port, Bintulu Port, Miri Port, Labuan Port, Kota Kinabalu Port and Sapangar Bay Oil Terminal Port.

Currently, the Group owns and operates 15 licensed vessels that comply with health, safety and environmental standards, ranging from 540 deadweight tonnage (DWT) to 7,820 DWT. These vessels operate in the inner and outer port limits of various seaports in Malaysia.

Related: Malaysia: Straits Energy Resources concludes FY 2022 with 43.1% jump in net profit
Related: Malaysia: Straits Energy Resources completes milestone biofuel bunkering op in Johor

Photo credit: Straits Energy Resources Berhad
Published: 3 May 2024