Malaysia-listed Straits Inter Logistics Berhad (Straits), the parent of Tumpuan Megah Development Sdn Bhd (Tumpuan Megah), on Wednesday (25 November) posted a 66% fall in its third quarter (Q3) 2020 net profit due to reduction in revenue from the oil trading & bunkering services, due to Covid-19 related economic restrictions.
Straits recorded net profit of MYR 0.75 million (USD 184,026) in Q3 2020, compared to net profit of MYR 2.20 million (USD 539,811) during Q3 2019, showed its latest financial statement.
The group said its revenue for the current quarter decreased by 28.6%, a MYR 64.5 million drop to MYR 161.2 million as compared to MYR 225.7 million recorded in the corresponding quarter of the previous year.
Specifically, segment revenue from the company’s oil trading and bunkering services was MYR 157.3 million in Q3 2020, representing a 29.9% drop from revenue of MYR 224.7 million in Q3 2019.
“The reduction in revenue is mainly because of the COVID-19 pandemic that hit the shipping industry worldwide including Malaysia,” explained the company.
“The Malaysian Government has announced the Recovery Movement Control Order (RMCO) in early June where more activities were allowed subject to social distancing.
“Therefore, the oil trading & bunkering services segment and inland transportation & logistics segment has seen an improvement in revenue of MYR 85.5 million and MYR 0.5 million respectively compared to the preceding quarter.
“However, the economy of the country was still in a recovering stage compared to previous year.
“The decrease in profit was mainly due to lower profit contribution by the oil trading & bunkering services segment and initial setup cost incurred by the port management segment of MYR 2.2 million and MYR 0.7 million respectively.”
In line with the group’s business strategy to further expand its bunkering services and supply of Marine Fuel Oil, it had on 24 July, 2020, through Beluga Asia Ltd, a wholly-owned subsidiary of Tumpuan Megah, entered into a Memorandum of Agreement to acquire a bunker vessel, M.T. Veronica for a purchase consideration of MYR 10.4 million (USD 2.45 million).
The company said the acquisition will enlarge the vessel fleet capacity of the group and would provide flexibility in respect of its allocation and utilisation of vessels in undertaking the business segment.
Related: Straits Inter Logistics subsidiary SMF Eden acquires “M.T. MO Satu” bunker tanker for USD 4.5 million
Related: Straits Inter Logistics sees 67.8% fall in Q2 2020 profit due to Covid-19 related impact
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Photo credit: Straits Inter Logistics Berhad
Published: 30 November, 2020
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