The world’s largest owner and operator of very large crude oil carriers (VLCCs) Bahri reported a massive jump of 133.77 percent in its profit for the first quarter of 2020 despite COVID-19 challenges.
The company’s net profit after tax reached SAR 419.22 million (USD 111 million) from SAR 179.33 million recorded in the same period in 2019. The growth also represents a quarter-to-quarter increase of 68.3 percent from SAR 249.08 million.
Bahri said that the increase in quarterly earnings was driven by a rise in freight rates and strong demand for oil transportation which pushed the number of voyages during the quarter.
To remind, the company embarked on a major fixing binge of very large crude carriers (VLCC) in March, which spurred daily tanker rates and boosted demand for tankers.
The fixtures followed on the back of UAE’s announcement to raise crude output to 4.0 million b/d from 3.2 million b/d in February, with an objective to boost capacity to 5.0 million barrels.
Bahri reportedly hired up to 25 tankers on subject, a rare move from the VLCC owner which has not been that active on the spot market.
The fixing spree saw rates skyrocket from USD 30k to USD 299K per day as charterers scramble to secure floating storage for excess crude. The VLCC market volatility resulted in some tankers securing a head-spinning USD 410K fixture.
“The results are a testimony to our constant desire and our unmatched capabilities to seize opportunities in the market as they emerge. Our extensive efforts to enhance operational efficiency and improve productivity have also paid off,” Abdullah Aldubaikhi, CEO, Bahri, said.
Bahri said that its total revenue for the quarter under review rose to SAR 2.08 billion, up 22.06 percent from SAR 1.7 billion a year ago, and 7.36 percent from SAR 1.94 billion in the fourth quarter of 2019.