SHIPOWNER Halim Mazmin Bhd expects income to get a boost following the signing of agreements with Mediterranean Shipping Co SA for the charter of its two 2,680-twenty-foot-equivalent-unit (TEU) container vessels for two years.

 
Mediterranean Shipping is the world's second largest carrier in terms of container slot capacity and the number of container vessels operated.

 
Halim Mazmin executive chairman Tan Sri Halim Mohammad said the company received competitive rates from Mediterranean Shipping for the charter of the two container vessels - Japan Senator and America Senator - which began operations a week ago.

 
Japan Senator has been renamed MSC Tasmania while the new name for America Senator is MSC America. The two ships call at key ports in the Far East, Mediterranean and Europe.

 
"We got better rates. This is in line with the uptrend in the time charter level on this type of vessels. There is a shortage of this kind of vessels.

 
"We (Halim Mazmin and Mediterranean Shipping) have decided for two years as we want to evaluate our performance in a rising market. It is quite prudent for both sides to look ahead. This augurs well and will boost the group's future income," Halim told Business Times in an interview.

 
He said the company has another two container vessels, Cap Colville and Cap Colorado, with 1,510 TEUs each and the two are trading in Asia Pacific and North and South America.

 
Halim said the four container vessels have been contributing about 60 per cent to the  group's revenue, of which MSC Tasmania and MSC America have been the major  contributors. He expects the trend to remain for its current financial year ending December 31 2004.

 
"The two vessels (MSC Tasmania and MSC America) have been performing extremely well, contributing effectively to the group's profit," he added.

 
Halim also said the company's healthy balance sheet and cash reserves of more than RM100 million will enable it to expand its fleet of vessels and seize opportunities for expansion.

 
He said the company has several offers to purchase vessels but decided not to proceed at the moment because of the rising value for second-hand tonnage.

 
"We have decided not to proceed just yet. In our view, it will be prudent to wait and see where the market is going to be in the final quarter of this year.

 
"We have many opportunities. We'll not rush into purchasing as it has always been our business philosophy to acquire when the time is right and when the prices can be justified," Halim said.

  
Being a smaller player, he said, the company needs to preserve its business to survive when the market is not in its favour.

 
He expects the value of second-hand ships to soften as China slows down its imports. "This we can see already. The bulk freight market and time charter levels have fallen compared to six months ago," Halim said.

 
However, he is optimistic that the bulk rates will still enjoy a commendable level for another period of time which is about a year or so.

 
Halim said container ships continue to remain the company's priority although it is also looking at product tankers.

 
The company has nine vessels, of which four are product tankers -Meridian Sun, Meridian Star, Meridian Vega and Meridian Mira. It also has one bulker, Meridian Polaris, which is the largest in the country with 149,475 deadweight tonnes.

 
On the company's financial performance for the current year, Halim expects it "to maintain if not better" operations.

 
"The company is positive on its performance as all its nine vessels are fully employed on short- and long-term charters with reputed international shipping lines on secured terms and conditions that will remain unaffected by the vagaries and fluctuating fortunes of the market forces.

 
"We don't have ships on speculation and that has been the hallmark of our success for the last eight years," he added.

 
For the financial year ended December 31 2003, Halim Mazmin posted a net profit of RM27.95 million on the back of a turnover of RM131.2 million.