Halim Mazmin posts highest net profit since listing in 1996

25 February 2005 

Shipowner Halim Mazmin Bhd's 2004 net profit surged 146.63 per cent to RM68.93million, its highest since it was listed in
1996.
 
Executive chairman Tan Sri Halim Muhammad said the impressive net profit was duo to the continued operations of all vessels and disposals of three vessels - namely product tanker Meridian Sun. and container vessels MSC America and MSC Tasmania - last year which brought a RM39.13 million gain.
 
Without the disposals, Halim Mazmin would still have reported a higher net profit compared to the RM27.949 million recorded in the previous year.
 
Turnover for the financial year 2004 fell to RM127.093 million from RM131.201 million due to the disposal of the three vessels during the year.
 
For its fourth quarter, the company's net profit escalated to RM41.274 million from RM9.217 million in the previous corresponding period, while revenue fell to RM28.003 million from RM33.813 million.
 
The company announced a dividend of 7 sen per share, or 14 per cent per share, which gives a dividend yield of 9 per cent based on the current market price of Halim Mazmin shares.
 
He said Halim Mazmin will spend RM22.5 million to pay for the dividend.
 
Halim expects the company's current financial year to be favourable on the back of Malaysia's rising export and good freight rates.
 
"The company's fleet of vessels are expected to benefit from its existing long term charter contracts and the buoyant outlook of freight rates. Now is the golden years for the shipping industry. I expect this to continue for at least another year or two," he said.
 
Halim said the disposal of the ships at the right time has enabled the company to get a higher value.
 
"If the ships are traded over the next two years, we would not have achieved the same returns," he said.
 
He said the disposals have enabled the company to reduce its gearing to 0.9 times from 1.87 limes.
 
With the disposals, Halim said the company now has a huge cash reserve amounting to about RM322 million, allowing it to position itself for further expansion.
  
He said the company is now looking at acquiring additional ships as and when the time is right.
 
"I am of the view that sales of second-hand ships are on the high side due to the rising demand and lack of capacity of bulk and containership. We are adopting "wait-and-see'' attitude and will seize opportunity when the right time comes," Halim said.
 
Halim Mazmin has also entered into an agreement to dispose its capesize bulk carrier, Meridian Polaris and profit from this disposal is expected to be realised in the second quarter of this year.
 
With this disposal, Halim owns five vessels, of which three are product tankers while another two are container ships.
 
He also expressed dissatisfaction over the small amount of cargoes carried by the Malaysian ships.
 
He said last year, only 15 per cent of Malaysia's total freight, were carried oil Malaysian ships while the remaining 85 per cent were on foreign ships.
 
Hence, he called for government linked companies (GLCs) or Government agencies which controlled the shipment of cargoes to form joint ventures with Malaysian shipowners so that they can nominate the local shipping companies on first opportunity.
 
Halim said the move can help reduce Malaysia's dependency on foreign ships.
 
He also said that the company will continue to offer maritime training to school leavers as there is quite an acute shortfall of personnel in shipping industry.
 
"We (Halim Mazmin) are facing problems but we're still manageable. At present, we have to rely on services of foreign officers." he said.
 
He said about 20 per cent of Halim Mazmin's personnel's are foreigners and the company wants to develop a pool of officers who can continue to man its ships for the future.

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