Dubai’s Gulf Navigation expects to return to profit in 2021
Gulf Navigation, a Dubai-listed maritime and shipping company, said it expected to be profitable by the end of this year after it restructured a loan of Dh200 million ($54.4m), its biggest debt.
As a result of its new arrangement with Australis Maritime, the cost of its debt will be reduced by 25 per cent, or Dh4m annually, the company said in a filing yesterday to the Dubai Financial Market, where its shares are traded.
Gulf Navigation also said it had completely paid off its obligations to Abu Dhabi Commercial Bank and intends to negotiate “new and flexible terms” with other lenders to restructure its remaining debt.
The shipping company reported a loss of Dh279.1m on revenue of Dh145.8m last year as it wrote off the Dh197m carrying value of one of its vessels, Gulf Livestock 1, which sank in the East China Sea off the coast of Japan in September.
It ended the year with liabilities of Dh539m, of which about Dh325m is owed to banks.
Gulf Navigation appointed a new board in September to fast-track its business turnaround strategy amid tough market conditions.
The board is led by Sheikh Theyab bin Tahnoon with Abdulla Atatreh, Mohamed Alhammadi, Abdulaziz Alongary and Waleed Mohammad among the members.
Gulf Navigation’s shares closed up 1.26 per cent at Dh0.32 yesterday.
“The company has made major changes to the operating model and reduced administrative expenses in order to enhance growth and sustainability,” Gulf Navigation said in its latest filing.
The company has taken steps to improve the efficiency of its vessels and chartered them to reliable customers on a long-term basis – a move that could help it to become profitable by the end of this year, it said.
It is also assessing options to expand its fleet through new mergers and acquisitions as it pushes ahead with a plan to expand its business locally and regionally.
Gulf Navigation also signed a deal to acquire a group of petrochemical and dry bulk carriers from Greece-based Empire Navigation in February to expand its fleet.
The fleet includes petrochemical tankers, livestock transport ships and marine support vessels, which allows it to service different markets.