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M&G executive chairman Datuk Mohd Azlan Hashim said demand for the marine logistics had been fairly robust throughout 2018 and 2019, mirroring the demand for clean petroleum products. 
M&G executive chairman Datuk Mohd Azlan Hashim said demand for the marine logistics had been fairly robust throughout 2018 and 2019, mirroring the demand for clean petroleum products. 

KUALA LUMPUR: Marine & General Bhd (M&G) is positive of further growth opportunities in demand for marine logistics for downstream liquid bulk carriers despite the oil price shocks.

M&G executive chairman Datuk Mohd Azlan Hashim said demand for the marine logistics had been fairly robust throughout 2018 and 2019, mirroring the demand for clean petroleum products. 

“This trend is expected to continue in 2020,” Azlan said in a statement on M&G’s latest interim result today.

”The group is of the opinion that there is further growth opportunities within this segment and will continuously be evaluating opportunities for additional investment in the future.

“This, however, will only be undertaken after a thorough assessment of the projected long-term returns and the available resources,” he added.

M&G reported a net loss of RM11 million in the third quarter (Q3) ended January 31, 2020 On a revenue of RM50.3 million.

It said the net loss was due to the finance cost and vessel depreciation expenses.

The group changed its financial year end to April 30 from December 31, effective April 30, 2019. Therefore, there is no comparative results from the same quarter last year.

M&G said the upstream division remained the main revenue contributor, generating 72 per cent of total revenue, while the downstream division generated the balance 28 per cent. 

For the nine-month period, the group recorded a net loss of RM31.62 million with RM158.7 million revenue.

Azlan said during this period, the oil and gas (O&G) industry continued to be challenging as there were many disruptors that could dampen the momentum of recovery.

This included low charter rates due to vessel oversupply, which may affect the ability of many offshore service vessels operators to keep operating their vessels. 

“There has also been a steep drop in oil prices in recent weeks as a result of declining demand due to the impact on global economy arising from the spread of corona virus. 

“More recently, the failed attempt between OPEC and Russia to rein in oil production in order to mitigate oversupply and maintain the oil price has exacerbated the decline in oil prices,” he said.

Azlan said given the financial condition of itsmain operating subsidiary of its upstream division, Jasa Merin (Malaysia) Sdn Bhd (JMM), M&G had restructured its borrowings on terms more sustainable in the face of the challenging period in the O&G industry.

He said the restructuring, although undertaken prior to the recent decline in demand, should nevertheless enable JMM to be better positioned in the upstream marine logistics segment and improve its underlying viability going forward.

“With the uncertainty brought about by the price war between the two largest oil producers, namely Saudi Arabia and Russia, the Board will continue to monitor the situation carefully,” he added.

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