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NewOcean records USD 304.3 million loss, portion of SG bunkering business to remain

‘A portion of our marine bunkering business in Singapore will remain, with a focus on oil products of relatively stable gross profits and high sulphur fuel oil,’ it said.




New Ocean Energy 1

Hong Kong-listed NewOcean Energy Holdings Limited (NewOcean) on Wednesday (31 March) reported in its unaudited financial year 2020 results (FY 2020) that its gross profit margin derived from oil bunkering business has been substantially reduced or turned into gross loss margin due to COVID-19 and the slump in global oil prices in first half year of 2020.

The group said its overall gross margin for oil products and electronic components decreased to 1.0% as compared to 6.8% last year.

The group recorded net loss of HKD 2.366 billion (USD 304.3 million) during FY 2020, mainly due to the drop in gross profit and additional impairment provision for goodwill, intangible assets, trade receivables, other receivables, inventories and property, plant and equipment, etc.

Its revenue for the year decreased by around 30.99% to approximately HKD 19.180 billion attributed primarily to the fall in average price of energy products as well as the drop in total sales volume. In FY 2019, NewOcean saw HKD 27.791 billion in revenue.

The group’s sales volume for energy products fell to approximately 5.64 million metric tonnes in 2020 compared to 7.51 million metric tonnes in 2019. 

Specifically, the company’s oil products business generated total sales revenue of HKD 224.1 million with a gross margin of 2.04% in FY 2020 compared to HKD 848.2 million revenue and a gross margin of 4.4% in FY 2019.

For the past twenty years, NewOcean said it has always kept up its obligations and has never breached any debt covenants. However very unfortunately, from April 2020 onwards, a series of unexpected negative events caused banks to freeze the group’s credit and request for early repayment.

The pandemic, slump in oil prices, and the stand-off between China and the United States seriously affected the group’s business especially the oil bunkering business in Hong Kong and Singapore and the electronic business in the People’s Republic of China.

As a result, the gross profit margin derived from oil bunkering business and electronic business has been substantially reduced as compared to last year or in certain cases turned into gross loss margin.

Due to severely unfavourable market conditions, some of the group’s key competitors in the oil products market sold large lots of inventory at bargain prices to cash in during March and April.

NewOcean said it was a tough decision to for the group to reluctantly follow suit and slash prices under the pressure of its mounting inventories over the successive months, resulting in a steep dive in its overall gross profits for energy products.

Adverse market sentiment also caused its oil product clients to delay the repayment of trade or other receivables to a significant extent; for which, an allowance for impairment loss of about HKD 760 million had been made.

In 2020, more than 10 monohull [single hull] oil tankers had been written off due to a change in the specifications of oil tankers in  Mainland China, and the group had shut down a number of auto-gas refueling stations because of the decreasing demand, resulting in a loss of approximately HKD 120 million for the disposition of the above fixed assets.

With limited liquidity from to the lack of support from banks to back its business NewOcean said it decided to scale down both its marine and on-land bunkering businesses; and hence, an allowance for impairment of approximately HKD 420 million was made at the end of the year.

Additionally, due to the crash of Hin Leong Trading (Pte.) Ltd. and the slump in global oil prices during the first half of 2020, many banks had extended requests to the group limit or terminate the utilization of letters of credit and other short-term credit facilities.

In order to ease pressure on liquidity and improve the financial position of the group, NewOcean’s directors implemented a range of measures, including opening negotiations with banks which resulted in an agreement for debt restructuring.

“With the significant scale-down of our oil products business, we are committed to focus not only on the sales of products with high gross profits, but also on lowering our operating costs,” said NewOcean.

“As the costs of refueling business in Hong Kong are relatively high, the group will step up its efforts to sell wholesale to our clients who are distributors, and to lease its existing oil tankers to wholesalers or list them for sale.

“As to our business in Singapore, a certain extent of the marine bunkering business will remain, with oil products of relatively stable gross profits and high sulphur fuel oil being the key focus of the business. 

“Meanwhile, the group will take the occupancy of a small portion of a total leased capacity of 300,000 tonnes in a floating storage unit, while the remainder will be leased to third parties to keep running costs down.”

Related: NewOcean Energy issues USD 304.8 million net loss warning ahead of FY 2020 results
Related: NewOcean proposal to adjourn court scheme meeting approved by creditors
Related: NewOcean creditors meeting application granted by Supreme Court of Bermuda
Related: NewOcean planning creditors meeting, foundation of debt restructuring plan laid out
Related: NewOcean records USD 174 million 1H 2020 loss; Singapore bunkering business remains
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
Published: 1 April, 2021


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MAN Energy Solutions opens largest service hub in Singapore

New facility able to meet demand for repairs, maintenance and training services for MAN Energy Solutions’ alternative-fuel engines, such as two-stroke methanol dual-fuel engines.






Singapore on Friday (1 March) welcomed the opening of MAN Energy Solutions’ new mixed purpose facility today that will expand their local business activities.

MAN Energy Solutions is one of the global engine makers of alternative-fuel engines, and is driving the maritime energy transition by enabling the use of cleaner fuels in ships around the world.

Located in Tuas, MAN Energy Solutions' EUR 20 mil (SGD30 mil) investment will include a new MAN PrimeServ training academy for customers and employees, a logistics centre to serve as the warehouse for Asia, and a PrimeServ workshop to provide maintenance and repair services, including for MAN Energy Solutions’ alternative-fuel engines.

The new facility will serve as the largest service hub for MAN Energy Solutions’ activities and engagements outside of Europe, and will allow shipowners and ship managers to gain round-the-clock access to technical services for MAN Energy Solutions products such as repairs and maintenance of their alternative-fuel two-stroke engines, reduce turnaround times for ships due to quicker access to spare parts, and providing training for seafarers on the safe operation, maintenance, and troubleshooting of all MAN Energy Solutions equipment.

The new facility would also be timely to cater to the demand for repairs, maintenance and training services for MAN Energy Solutions’ alternative-fuel engines, such as the two-stroke methanol dual-fuel engines that are already available and for the two-stroke ammonia dual-fuel engines that are currently in development.

The mixed-purpose facility was launched by Dr Amy Khor, Senior Minister of State, Ministry of Transport and Ministry of Sustainability and the Environment.

SMS Khor said: “MAN Energy Solutions has been a long-time partner for Maritime Singapore since its establishment here in 1977. I am heartened that MAN Energy Solutions has placed a strong vote of confidence in Singapore by setting up its second hub outside of Europe here, setting the stage for collaboration in maritime decarbonisation, digitalisation, and talent development.”

“The expansion of MAN Energy Solutions’ workshop and warehouse activities will provide much needed capacity to support the maintenance of ocean-going vessels that adopt engines fuelled by new marine fuels.”

“MAN Energy Solutions' expanded training academy will also support Singapore's drive to upskill and reskill of our workforce, to build confidence for maritime workers to safely handle new marine fuels. I look forward to many more years of meaningful collaboration, especially in these emerging areas.”

Dr Uwe Lauber, CEO MAN Energy Solutions, said, “With over 9,000 square metres of floor space, Singapore is our largest hub outside of Europe in what is one of the most important maritime centres globally. We intend for this mixed-purpose facility to advance the maritime energy transition locally through education, logistics, and a comprehensive after-sales portfolio. Ultimately, we are ‘moving big things to zero’ and leading our customers towards a multi-fuel, decarbonised future.”

Mr Teo Eng Dih, Chief Executive Officer of the Maritime and Port Authority of Singapore, said, “As the world’s largest bunkering port and major transhipment hub, Singapore is committed to the maritime digitalisation and the green transition. We have been long-time partners with MAN Energy Solutions and have been working closely together in various methanol and ammonia shipping consortiums and also in skills development.”

“MAN Energy Solutions’ new maintenance and training facility here will add deep expertise and experience to the growing and vibrant new fuels ecosystem here and also upskilling of our maritime workforce, especially in the area of new methanol and ammonia engines.”

Nicolas Brabeck, Managing Director, MAN Energy Solutions, Singapore, said: “This new facility represents one of the biggest investments that we have made outside of our product centres within recent years. It forms a key part of our company’s Triple 10+ business strategy that aims for growth through green technologies. In this context, we intend to equip our personnel with the right skillsets to handle the new technologies coming online and drive our business forward. We therefore expect to significantly increase staff numbers on-site to some 400 people by 2027, and look forward to cultivating great relationships with our customers and the various, Singaporean authorities.”

MAN Energy Solutions’ Singapore office is its largest service hub outside Europe, and currently employs 250 staff.


Photo credit: Maritime and Port Authority of Singapore
Published: 4 March 2024

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Singapore Maritime Officers’ Union launches upgraded Wavelink Maritime Simulation Centre

Centre includes new dual-fuel engine simulators, offering realistic training scenarios to prepare seafarers for the evolving maritime landscape and the shift to cleaner bunker fuels.





Wavelink MPA

Singapore Maritime Officers'​ Union launched the newly upgraded Wavelink Maritime Simulation Centre (WMSC), according to Maritime and Port Authority of Singapore (MPA) on Thursday (29 February).

The SGD 2.75 million facility includes new dual-fuel engine simulators, offering realistic training scenarios to prepare seafarers for the evolving maritime landscape and the shift to cleaner fuels, in line with industry sustainability goals.

The WMSC was unveiled by Minister Grace Fu, Minister for Sustainability and the Environment at SMOU’s seminar titled Advancing Maritime Resilience: No One is Left Behind.

The seminar, focusing on transition and training, aimed to reinforce shared responsibility, empower the maritime workforce through training, and champion sustainability without disadvantaging stakeholders in achieving #netzero emissions by 2050.

MPA's Assistant Chief Executive (Corporate & Strategy) Hoe Soon Tan participated in a panel discussion on "Prioritising a 'Just Transition", addressing strategies to bridge skill gaps and ensure a smooth and equitable transition for all seafarers.


Photo credit: Maritime and Port Authority of Singapore
Published: 4 March 2024

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Singapore: EPS orders ammonia, LNG dual-fuel vessels from China

EPS signed one contract for a series of ammonia dual-fuel bulk carriers with CSSC Beihai Shipbuilding and another for a series of LNG dual-fuel oil tankers with CSSC Guangzhou Shipbuilding International.






Singapore-based Eastern Pacific Shipping (EPS) on Wednesday (28 February) said it signed two new contract orders in a signing ceremony in Shanghai, one for a series of ammonia dual-fuel bulk carriers with CSSC Beihai Shipbuilding and another for a series of LNG dual-fuel oil tankers with CSSC Guangzhou Shipbuilding International. 

The contracts signed cover four 210,000 dwt ammonia dual-fuel bulk carriers and two 111,000 dwt LNG dual-fuel LR2 oil tankers, expanding our fleet of green vessels on water. 

“These are pivotal for EPS, testament to our continued commitment towards the decarbonisation of shipping,” EPS said in a social media post.

Manifold Times recently reported EPS signing 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.

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


Photo credit: Eastern Pacific Shipping
Published: 1 March 2024

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