Saudi Arabian shipping giant Bahri has reported a sharp increase in first quarter net profits for 2023 built on strong freight rates for its largest crude carriers.
The company, one of the world’s largest operators of VLCCs, announced profits of SAR 492.5m ($131m) up nearly 660% from SAR 64.9m in the same period of 2022.
The company said its revenues had increased by SAR 449m in oil transportation and by SAR 377m for ships in its chemicals sector. Total revenues for the quarter were SAR 2.375bn ($633m)
Bahri, a joint venture between the country’s sovereign wealth fund and oil major Saudi Aramco, owns and operates one of the world’s largest fleets of VLCCs.
Its 96-strong fleet includes 40 VLCCs. Only China Merchants Energy Shipping, China Cosco Shipping and Euronav have more of the largest crude carriers, according to Clarksons Shipping Intelligence Network.
Bahri net profits fell 14% from the fourth quarter of 2022. The company said revenues had been boosted at the end of last year from asset sales but revenues had also been hit by a decline in rates at the start of 2023.
Average time charter equivalent rates for VLCCs were below zero from January 2021 to August 2022 before the impact of Russia’s invasion of Ukraine sent shipping rates soaring, according to Baltic Exchange data.
Rates were consistently above $20,000 a day for the last quarter of 2022 and hit a high above $75,000 in November just before the start of sanctions and the oil price cap was imposed on the Russian trade by the G7 group of nations.
But a slower start of 2023 saw rates dip below $20,000 a day for a month before climbing again to reach nearly $80,000 towards the end of the quarter, according to Baltic data.
VLCC rates have since fallen again and currently stand at about $16,000 a day amid global economic concerns with muted crude purchasing so far this year by the world’s largest importer, China.
