Marine & General’s 1Q loss widens on weaker oil demand

by TMR / graphic by MZUKRI

MARINE & General Bhd’s net loss in its first quarter ended July 31, 2020 (1Q21), widened to RM14.97 million from RM8.43 million, contributed by the reduced operating margin during the pandemic due to the thinning oil demand.

Revenue for the quarter improved 3% to RM55.3 million from RM53.51 million, in line with its deployment of two new tankers from the group’s downstream division on their maiden voyage charters the group said in a statement.

The revenue contribution from its upstream division declined 4.5% to RM38.6 million as charter rates were subjected to increased pressure from the softening demand for oil. It recorded an operating loss of RM12.4 million.

The group’s downstream division recorded a revenue of RM16.7 million, 28% higher compared to the previous year while reporting an operating loss of RM5.8 million.

The group expects its business operation to be significantly affected by the bearish outlook of the oil and gas sector, which would reduce charter rates and vessel utilisation as charterers negotiate for termination, and suspension of contracts, it said.