Improving tanker rates and the sale of older tonnage have lifted profits for Saudi Arabian shipping giant Bahri, according to the company’s latest results.
Bahri, the National Shipping Co of Saudi Arabia which has one of the largest VLCC fleets in the world, reported net profits of SAR 495m ($132m) in the second quarter of 2023, an increase of 286% on the corresponding period last year. Revenues were also up 18%.
The sharp improvement was expected as the second quarter of 2022 saw the worst VLCC rates for years, according to Baltic Exchange data. Time charter equivalent rates were in negative territory for the whole of that period before turning positive in August 2022.
Clean and dirty tanker rates have been lifted because of changes to trade flows linked to Russia’s invasion of Ukraine and the subsequent embargo imposed by the European Union. Oil travels longer distances boosting tonne-miles and revenue.
Rates have fallen back from the highs seen in the first quarter of this year in part because of uncertainty over recovery in China, the world’s largest importer of crude.
TCE daily rates for VLCCs stood just above $15,000 on Friday. But revenues and profits were down less than 1%, the figures showed.
Bahri has a fleet including 39 VLCCs and 36 chemical and product tankers, according to the company’s website. It also has six multipurpose vessels and 11 dry bulk carriers.
Only China Merchants, China Cosco Shipping and Euronav have more VLCCs, according to Clarksons’ Shipping Intelligence Network.
The company, a joint venture between the country’s sovereign wealth fund and oil major Saudi Aramco, said the figures were based on “the improvement of performance in multiple sectors, especially the oil sector”.
Bahri also reported an increase in other income of SAR 88m ($23m) based on fleet sales. Brokers in May reported the sale of one of its oldest VLCCs, the 316,000-dwt Lulu (built 2003), for $42.5m to a Chinese buyer.
In April, unknown interests based in the United Arab Emirates swooped on Bahri’s 49,000-dwt MR Bahri Iris (built 2005), with brokers putting a $17m price tag on the deal. Bahri does not comment on sale-and-purchase transactions.
