Malaysia-listed Straits Inter Logistics Berhad (SIL), principally engaged in oil trading, bunkering and investment holding activities, on Thursday (25 June) posted its revenue for current quarter (Q1 2020) increased by 141.2% compared to a similar quarter in 2019.
The total revenue for Q1 2020 was RM 262.4 million (USD 61.3 million), marking a RM 153.63 million (USD 35.9 million) jump from RM108.8 million (USD 25.4 million) in Q1 2019.
The company recorded net profit of RM 1.02 million in Q1 2020, a decrease of 24.5% as compared to RM 1.36 million of Q1 2019.
Profit before tax (PBT) in the first quarter was RM 1.8 million, down 31.2% against RM 2.6 million in Q1 2019.
“The expansion in revenue was attributable to more bunkering jobs being secured to provide Low Sulphur Fuel Oil (LSFO) as a result of the IMO 2020 sulphur cap effective 1 January, 2020,” explained SIL.
“The decrease in PBT was due to loss of RM0.7 million incurred in the Inland Transportation & Logistics segment and an initial start up cost of RM0.5 million in the Port Management segment.
“However, a 26% improvement in its share of profits from its associate company had contributed a profit of RM0.4 million to partially offset these losses.”
Apart from the sulphur cap, the group also attributed the increase in revenue to the commencement of bunkering services by the newly acquired vessel, M.T. SMF Ixora.
The group’s strategy from the previous quarter to increase revenue and diversify revenue streams has proved effective but narrowing bunker price spreads in Q1 2020 has affected profit margins.
“Although the majority portion of the Group’s activities are considered as essential operations, the COVID-19 pandemic may possibly have financial implications to the Group,” it added.
“Nonetheless, the Board of Directors of the Company are closely monitoring the impact of this pandemic on the Group’s result and to ensure appropriate risk mitigating measures are undertaken to preserve value and protect shareholders’ interests.”
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Photo credit: Straits Inter Logistics
Published: 28 June, 2020
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