Hong Kong-listed bunker supplier and oil company NewOcean Energy Holdings Limited posted a 96% increase in profit for the year ended 31 December, 2017.
It recorded net profit of HKD 1.07 billion ($ 140 million) in 2017, compared to profit of HKD 0.54 billion in 2016, according to financial records.
Total revenue in 2017 was HKD 22.06 billion, about 40% higher than revenue of HKD 15.70 billion in the year before.
“In 2017, the group quickened its pace and first established its procurement centre in Singapore, which mainly assisted its marine bunkering business in Hong Kong to diversify the sourcing channels, reduce procurement costs, and explore the Singapore market,” it said.
“When establishing such company in Singapore, we decided to become a joint venture partner with a scaled shipping company. The aim was to accelerate our pace of market development by leveraging on our partner’s business connections in the local region.”
In Hong Kong, NEH acquired 51% of the shares of three auto-gas trading and oil products transportation companies allowing the group to expand its business from marine bunkering to bunkering on land; the oil companies owned 17 oil trucks and were the primary agent of the four major oil companies.
NewOcean recorded sold 783,600 metric tonnes (mt) of bunkers at Hong Kong in 2017, a decrease of 7.6% when compared to sales of 848,300 mt in 2016; both sales of fuel oil and marine diesel oil (MDO) “experienced a modest decline” due to suppliers in Mainland China deliberately lowering the price of marine fuel in 2017.
“We believe that such situation [at Hong Kong] will still last for a period of time, which will bring extra operating burdens for those small-scaled operators,” it says.
“In this regards, ensuring the quality of our oil products and services is the only practical strategy which will help limiting the loss in our business volume. “
The company’s Singapore business which begun in November last year posted total sales volume of 118,700 mt for its 2017 operations.
“With this rate of development, it is possible that the sales volume achieved by our company in Singapore next year may be comparable to the current volume achieved by our company in Hong Kong,” it notes.
“All these have been a solid proof that the establishment of our company in Singapore would pose a significant positive impact to the expansion of our marine bunkering business outside China (including the two markets in Hong Kong and Singapore).”
Moving on, the bunker supplier stated plans on business expansion to the Malaysia market.
“We are currently planning to expand our marine bunkering business to all of the ports in Malaysia; meanwhile, our company in Singapore will provide supply services of oil and technical support for these new markets.”
Published: 22 March, 2018
Kieran Michael C. Brown joins the bunkering firm with immediate effect.
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