Gulf Navigation Holding cuts losses and plans expansion

The only listed crude tanker operator in Dubai, Gulf Navigation Holding, narrowed its losses last year despite declining revenues.

Gulf Navigation Holding, the only listed crude tanker operator in Dubai, narrowed its losses last year despite declining revenues. The tanker company posted a net loss of Dh73 million (US$19.87m) yesterday, compared to a loss of Dh237m in 2010.

Expenses relating to assets that had been sold or put up for sale declined to Dh25m from Dh211m the previous year.

But revenues also fell, by 18 per cent, to Dh256m, as Gulf Navigation suffered from reduced freight rates arising from a global oversupply of tankers, and the disposal of its smaller vessels.

Last year was "a very difficult and challenging year for all sectors of the shipping industry", said Abdullah Al Shuraim, the chairman of Gulf Navigation.

"The company remains focused on the key strategic targets that we have set ourselves, in particular the continued expansion of the VLCC [very large crude carriers] fleet as part of a new Saudi VLCC company, and realignment of the organisation."

Gulf Navigation plans to expand its VLCC fleet by two vessels to nine, and expand its fleet of chemical tankers to 12 ships.

The value of tanker fleets has been impaired by reduced charter rates, according to a report released by Fitch Ratings. The oversupply of tankers that is keeping rates low will probably persist throughout the year, as new orders are close to completion, said the report. Ship owners are also smarting from capital constraints as banks are withdrawing from ship financing, according to Fitch.

The company is hopeful that sanctions by the United States and the European Union imposed on Iran will boost its business, as Asian consumers look further afield to make up for a shortfall in Iranian exports.

"Where's the oil lost from Iran going to come from? Some of it will come from here - Saudi Arabia, Kuwait and the UAE - but you also have to take some from West Africa, the Caribbean and North Sea," Atle Sebjornsen, the chief executive, told Reuters.

Millions of barrels of crude have been shipped from Europe to Asia in recent months, as the spread narrowed between Brent, the European benchmark, and crude sold into Asia from the Gulf.