The shipping industry bottomed out in 2018, Abdullah Aldubaikhi, the CEO of Bahri, the world’s largest owner and operator of very large crude carriers, is cited by Reuters as saying.
However, Aldubaikhi told Reuters that better days are coming, adding that “the years 2020 and 2021 will be the golden years for this industry.”
The tanker market in particular has been in the doldrums over the past couple of years, especially for crude carriers that have been faced with weak rates due to tonnage overcapacity, coupled with weak trading demand and OPEC output cuts.
Bahri is already reaping fruits from a better market year-on-year as it reported 34.3 percent higher net profit after tax in the third quarter of this year reaching SAR 81.2 million (USD 22.7 million).
The hike was mainly attributed to an increase in the company’s fleet and higher spot market rates specifically in oil transportation.
The Saudi shipowner has set sights on expanding its fleet further in cooperation with the Arab Petroleum Investments Corporation (APICORP). The duo inked an agreement in 2016 to launch the USD 1.5 billion APICORP Bahri Oil Shipping Fund (ABOSF) aimed at acquiring 15 very large crude carriers (VLCCs).
The fund will assist Bahri in increasing its VLCC fleet and will be realized in three phases with the total investments composed of debt and equity.
According to Aldubaikhi, the first phase aimed at raising USD 500 million will take place in 2019, while the second tranche would follow in the second quarter of 2020, Reuters informed.
Furthermore, Bahri is reportedly looking into diversification of its portfolio by acquiring maritime related companies that offer services outside of the Saudi shipping company’s area of expertise.
“We are looking at multiple acquisitions in the Middle East and Asia worth tens of millions of dollars,” Aldubaikhi told Reuters, adding that an entity is Asia is likely to be acquired next year.
As informed, the details of what those services might be were not disclosed.
Bahri currently owns 93 vessels including 46 VLCCs, 36 chemical/product tankers, 6 multipurpose vessels and 5 dry bulk carriers.
World Maritime News Staff