Malaysia-listed bunker player Straits Inter Logistics (Straits) recorded a 9.6% on year increase in net profit during the second quarter (Q2) of 2018.
The firm posted net profit of RM 683,000 (USD $166,930) in Q2 2018, more than net profit of RM 623,000 in Q2 2017, according to latest results.
Revenue was RM 44.2 million in Q2 2018, 64.9% more than revenue of RM 26.8 million in Q2 2017.
“The Group’s plan to build a sustainable revenue stream consisting of oil bunkering and trading in oil product is being realised as there is strong growth in both the oil trading and oil bunkering business for this second quarter of 2018,” it says.
“It has managed to increase its revenue for the second quarter of 2018 by RM17.39 million to RM44.20 million, from RM26.81 million achieved in the second quarter of 2017.
“Despite the increase in revenue in the second quarter of 2018, the Group achieved a profit before tax of RM0.77 million, as compared to RM0.76 million in 2017, which is only a marginal increase. This is due to the corporate exercise expenses being incurred and the strengthening of the Malaysian Ringgit against major foreign currencies.”
Moving forward, Straits says it will continue to expand its oil trading and bunkering business by increasing its deliverable tonnage capacities in this financial year.
It intends to move ahead to acquire 55% equity interest in Malaysia bunker player Tumpuan Megah Development Sdn. Bhd. (Tumpuan Megah), and has received approval from Bursa Malaysia Securities Berhad for the proposed acquisition on 7 August 2018.
“By acquiring direct competitor (horizontal acquisition), Straits is able to enhance its existing fleet size, and possibly, to expand its suppliers’ pool of oil products, which Straits could have comparative advantages to source its supplies at competitive prices as well as to enjoy larger assets base,” it explains.
“This Proposed Acquisition comes with a two years profit guarantee of profit after tax of RM5.0 million by the vendor of Tumpuan Megah, and this is expected to further contribute to the earnings of Straits.
“The Group will continue to assess the demand from its existing and potential customers through continuous marketing activities in increasing its oil bunkering activities in the coming year.”
Straits on 18 January 2018 entered into a non-binding Heads of Agreement (HOA) with Banle Energy International Limited (Banle) to explore any potential business cooperation and/or collaboration opportunities; it has extended this HOA to 17 February 2019.
Related: Bursa Malaysia approves Straits Inter Logistics acquisition of Tumpuan Megah
Related: Straits Inter Logistics to acquire Tumpuan Megah Development for RM35.75 million
Related: Straits Inter Logistics Q1 revenue up 57%
Related: Malaysia: Bunkering firms extend HOA arrangement
Related: Straits Inter Logistics: Positive outlook for Malaysia bunkering sector
Related: Malaysia-listed bunkering firm Straits Inter Logistics net profit up 27 times
Related: Straits Inter Logistics and Banle Energy explore bunker business opportunities
Photo credit: Straits Inter Logistics
Published: 27 August, 2018
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