National Shipping Company of Saudi Arabia (Bahri) has reported that its net profit for the quarter ended December 31, 2016, plunged by 42 percent, compared to the same period a year earlier.
Namely, the company’s net profit for the fourth quarter of 2016 stood at SAR 327.8 million (USD 87.4 million), down from SAR 566.4 million reported in the same quarter in 2015.
Bahri attributed the decrease in net income to lower spot market rates in general and specifically in oil transportation, and an increase in bunker costs as a result of higher oil and bunker prices during the current quarter compared to the corresponding quarter of 2015.
Additionally, the shipping firm said that fleet expansion limited the impact of lower spot markets rates during the current quarter compared to the corresponding quarter of 2015.
Furthermore, the company’s net profit for the current period was slightly down to SAR 1.76 billion from SAR 1.81 billion seen in the same period of the previous year, representing a decrease of around 3 percent.
Besides the lower spot market rates in general and specifically in oil transportation, the decrease was also attributed to a rise in financing charges as a result of an increase in SAIBOR & LIBOR rates during the current period compared to the corresponding period of 2015 as well as adding new financing facilities to fund the fleet expansion.
Bahri expanded its fleet by adding 10 vessels, which represent 14 percent increase to the entire fleet, which limited the impact of lower spot markets rates during the current period compared to the corresponding period of 2015.