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NewOcean records USD 174 million 1H 2020 loss; Singapore bunkering business remains

Covid and the slump in oil prices substantially reduced gross profit margins for the company’s bunkering and electronics businesses, it said in a recent financial filing.

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Hong Kong-listed NewOcean Energy Holdings Limited (NewOcean), the parent company of bunkering firm NewOcean Fuel, on Monday (31 August) published its unaudited interim results for the first six months (1H) ending 30 June, 2020. 

Following the profit warning posted by the group on Friday (28 August),  NewOcean reported a HKD 1,351 million (USD 174 million) loss for 1H 2020; the group recorded consolidated profit of 301 million (USD 38.9 million) in 1H 2019.

The loss was mainly due to the drop in gross profit and additional provision for account receivables, inventories and property, plant and equipment, it said. 

Due to COVID-19 and the slump in global oil prices, the gross profit margin derived from oil bunkering business and electronic business has been substantially reduced or turned into gross loss margin, explained NewOcean. 

The overall gross margin from these sectors decreased to 0.4% as compared to 6.2% of the same period in last year.

On top of the above, the company noted it also experienced undue delay in trade receivables collection and inventory being sold at a loss in recent months, therefore it has to make additional impairment losses on trade receivables and allowance for inventories for 1H 2020.

The additional impairment losses amount to HKD 554 million (USD 71.5 million), as opposed to HKD 8 million recorded in the same period last year.

Due to the collapse of Hin Leong Trading Pte Ltd and the global oil slump in 1H 2020, NewOcean noted a number of banks demanded a reduction in short term credit extended to the company. 

In order to mitigate the liquidity pressure and to improve its financial position, the company said its Directors have implemented a proactive approach to negotiate with banks to arrange and agree on a debt restructuring.

“Our gross margin of LPG business remained above 10%. Since our major competitors had turned to cut-throat tactics to sell products in large lots at low prices for cashing in during March and April, we unwillingly had to use the same tactic for our oil products business, that was to sell products below costs for the depletion of its holding stock to avoid further impairment risks from the ongoing oil price slump,” said NewOcean in its report. 

“These explain the recorded negative gross profits in our marine bunkering business during March and April. 

“As the market had restored in May and June, both our gross profits and gross margin had adjusted back to normal, despite the fact that our average overall gross profits for the six months were dragged down to a low of 1.11% (same period of last year: 4.28%).”

NewOcean said it will scale down its oil products business to focus on the sales of products with high gross profits as well as measures to reduce costs. 

Since the cost of refueling business in Hong Kong is relatively high, the company said it is committed to selling wholesale to clients who are distributors, and to lease its existing oil tankers to wholesalers.

Its bunkering business at Singapore will still continue operations due to relatively stable gross profits and high commodity flow.

Moving forward, NewOcean noted it will take the occupancy of around 100,000 tonnes among the total leased capacity of 300,000 tonnes of storage, while the balance of 200,000 tonnes will be leased to third parties to reduce overhead costs. 

Related: NewOcean Energy publishes profit warning to shareholders ahead of 1H 2020 results
Related: NewOcean Energy records 66% bunker sales jump to 4.5 million mt in FY 2019


Photo credit: NewOcean Energy Holdings
Published: 1 September, 2020

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Wind-assisted

Singapore: EPS orders its first wind-assisted propulsion system for tanker

Firm signed a contract for its first ever wind-assisted propulsion system, partnering with bound4blue to install three 22-metre eSAILs® onboard “Pacific Sentinel”.

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Singapore: EPS orders its first wind-assisted propulsion system for tanker

Singapore-based Eastern Pacific Shipping (EPS) on Thursday (22 February) said it signed a contract for its first ever wind-assisted propulsion system, partnering with bound4blue to install three 22-metre eSAILs® onboard the Pacific Sentinel

The turnkey ‘suction sail’ technology, which drags air across an aerodynamic surface to generate exceptional propulsive efficiency, will be fitted later this year, helping the 183-metre, 50,000 DWT oil and chemical tanker reduce overall energy consumption by approximately 10%, depending on vessel routing.

Suitable for both newbuilds and retrofit projects, the system delivers energy efficiency and cost savings for a broad range of vessels, regardless of their size and age.

Singapore: EPS orders its first wind-assisted propulsion system for tanker

José Miguel Bermudez, CEO and co-founder at bound4blue, said: “Signing an agreement with an industry player of the scale and reputation of EPS not only highlights the growing recognition of wind-assisted propulsion as a vital solution for maximising both environmental and commercial benefits, but also underscores the confidence industry leaders have in our proven technology.”

“It’s exciting to secure our first contract in Singapore, particularly with EPS, a company known for both its business success and its environmental commitment.”

“We see the company as a role model for shipping in that respect. As such this is a milestone development, one that we hope will pave the way for future installations across EPS’ fleet, further solidifying our presence in the region.”

Cyril Ducau, Chief Executive Officer at EPS, said: “EPS is committed to exploring and implementing innovative solutions that improve energy efficiency and reduce emissions across our fleet.” 

“Over the past six years, our investments in projects including dual fuel vessels, carbon capture, biofuels, voyage optimisation technology and more have allowed us to reduce our emissions intensity by 30% and achieve an Annual Efficiency Ratio (AER) of 3.6 CO2g/dwt-mile in 2023, outperforming our emission intensity targets ahead of schedule. The addition of the bound4blue groundbreaking wind assisted propulsion will enhance our efforts on this path to decarbonise.”

“With this project, we are confident that the emission reductions gained through eSAILs® on Pacific Sentinel will help us better evaluate the GHG reduction potential of wind assisted propulsion on our fleet in the long run.”

Pacific Sentinel will achieve a ‘wind assisted’ notation from class society ABS once the eSAILs® are installed. 

 

Photo credit: Eastern Pacific Shipping
Published: 23 February, 2024

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Crime

Vietnam: Two ships seized over 170,000 litres of unknown origin diesel oil

Vietnam Coast Guard said vessels were transporting various quantities of oil cargo: KG-91487- DR was transporting about 145,000 litres and KG-91602-TS transported about 25,000 litres.

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Vietnam: Two ships seized over 170,000 litres of unknown origin diesel oil

The Vietnam Coast Guard on Tuesday (20 February) said it seized a total of about 170,000 litres of unknown origin diesel oil in an operation. 

Patrol boats belonging to Coast Guard Region 4 Command detected two fishing boats – KG-91487- DR and KG-91602-TS – displaying several suspicious signs.

Initial investigations found all vessels without invoices and documents proving legal origin of the oil material.

The vessels were transporting various quantities of oil material: KG-91487- DR was transporting about 145,000 litres and KG-91602-TS transported about 25,000 litres.

The authorities made records of administrative violations,and escorted the vessels to Fleet Port 422 in Phú Quốc city, Kiên Giang province for further investigations and handling in accordance with the law.

 

Photo credit: Vietnam Coast Guard
Published: 23 February, 2024

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LNG Bunkering

Galveston LNG Bunker Port joins SEA-LNG coalition

SEA-LNG said move will further enhance its LNG supply infrastructure expertise and global reach, while giving GLBP access to the latest LNG pathway research and networking opportunities.

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Galveston LNG Bunker Port joins SEA-LNG coalition

Galveston LNG Bunker Port (GLBP), a joint-venture between Seapath Group, one of the maritime subsidiaries of the Libra Group, and Pilot LNG, LLC (Pilot), a Houston-based clean energy solutions company, has joined SEA-LNG, according to the latter on Wednesday (21 February). 

SEA-LNG said the move will further enhance its LNG supply infrastructure expertise and global reach, while giving GLBP access to the latest LNG pathway research and networking opportunities.

GLBP was announced in September 2023 and will develop, construct and operate the US Gulf Coast’s first dedicated facility supporting the fuelling of LNG-powered vessels, expected to be operational late-2026.

The shore-based LNG liquefaction facility will be located on Shoal Point in Texas City, part of the greater Houston-Galveston port complex, one of the busiest ports in the USA. This is a strategic location for cruise ship LNG bunkering in US waters, as well as for international ship-to-ship bunkering and cool-down services. GLBP will offer cost-effective turn-key LNG supply solutions to meet growing demand for the cleaner fuel in the USA and Gulf of Mexico.

Jonathan Cook, Pilot CEO, said: “With an initial investment of approximately $180 million, our LNG bunkering facility will supply a vital global and U.S. trade corridor with cleaner marine fuel. We recognise that SEA-LNG is a leading partner and a key piece of the LNG bunkering sector, and will give us access to insights and expertise across the entire LNG supply chain.

“LNG supports environmental goals and human health by offering ship operators immediate reductions in CO2 emissions and virtually eliminating harmful local emissions of sulphur oxides (SOx), nitrogen oxides (NOx) and particulate matter.”

President of Seapath, Joshua Lubarsky, said: “We are very pleased to be supporting the decarbonization of the maritime industry through strategic, and much needed, investments into the supply of alternative fuels.  We are also happy to be a part of SEA-LNG which has done a wonderful job in advocating for advancements in technology in this vital sector.”

Chairman of SEA-LNG Peter Keller, said: “We’re proud to welcome another leading LNG supplier to the coalition and are looking forward to a mutually beneficial relationship. With every investment in supply infrastructure in the US and worldwide, the LNG pathway’s head start increases. Global availability, alongside bio-LNG and e-LNG development, makes LNG the practical and realistic route to maritime decarbonisation.

“All alternative fuels exist on a pathway from grey, fossil-based fuels to green, bio or renewable fuels. Green fuels represent a scarce resource and many have scalability issues, so we must start our net-zero journey today with grey fuels. LNG is the only grey fuel that reduces greenhouse gas emissions, well-to-wake, so you need less green fuel than alternatives to improve emissions performance.”

 

Photo credit: SEA-LNG
Published: 23 February, 2024

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