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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Straits sees revenue from bunkering and oil trading jump 65%

Revenue up to $10.75m as firm targets expansion of its marine fuels business.

Image credit: Pixabay CC0

Updated on 29 Aug 2018 00:02 GMT

Malaysia's Straits Inter Logistics Bhd, owner of marine fuel specialist Selatan Bunker, reports that revenue from oil trading and bunkering during the second quarter (Q2) of 2018 rose year-on-year (YoY) by RM 17.39 million ($4.23m), or 64.9 percent, to RM 44.20m ($10.75m).

The figure also represents the total revenue amount for the group.

Profit after tax for the period, which runs between April and June, was up 6.0 percent YoY to RM 741,000 ($180,360).

For the first half (H1) of the year, revenue jumped RM 30.73m, or 61.6 percent, to RM 80.64m ($19.63m), whilst net profit dipped 5.9 percent to RM 1.28m ($311,500).

In a review of its performance, Straits said: "The Group's plan to build a sustainable revenue stream consisting of oil bunkering and trading in oil product is being realised as there is strong growth in both the oil trading and oil bunkering business for this second quarter of 2018."

Discussing its plans for the future, Straits noted: "The Group will continue to expand its oil trading and bunkering business by increasing its deliverable tonnage capacities, either through increasing its vessels base by way of acquisitions of new vessels or chartering third parties' vessels, along with strengthening its operational capabilities and broadening its geographical coverage to capture the growth opportunities in the oil bunkering industry in Malaysia and Asian region."

Tumpuan Megah

In line with this strategy, Strategy discussed its proposing to acquire a 55 percent equity interest in bunker supplier Tumpuan Megah Development Sdn. Bhd.

"By acquiring direct competitor (horizontal acquisition), Straits is able to enhance its existing fleet size, and possibly, to expand its suppliers' pool of oil products, which Straits could have comparative advantages to source its supplies at competitive prices as well as to enjoy larger assets base. This Proposed Acquisition comes with a two years profit guarantee of profit after tax of RM 5.0 million by the vendor of Tumpuan Megah, and this is expected to further contribute to the earnings of Straits," the company stated.

Banle Energy

On January 18, 2018, Straits had entered into a non-binding heads of agreement (HOA) with Banle Energy International Ltd to explore a potential business cooperation, including a joint venture and business partnership.

On May 17, Straits announced its plan to extend the HOA to February 17, 2019.

Banle is principally engaged in the trading of bunker fuel and the provision of marketing administrative services.

Related Links:

The lowdown on bunker firm Tumpuan Megah as 55% acquisition nears completion
Straits' executive director set to land 5.0-6.6% stake
Straits Inter Logistics to hold bunker acquisition vote in three weeks
Straits Inter Logistics Bhd.

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