KUALA LUMPUR (Feb 23): Malaysian Bulk Carriers Bhd (Maybulk) returned to the black by reporting a net profit of RM192.53 million for financial year ended Dec 31, 2021 (FY21), mainly on the back of a disposal, snapping a two-year losing streak. It posted a net loss of RM20.78 million in the year prior.

The dry bulk carrier's earnings per share (EPS) stood at 19.25 sen, compared with a loss per share of 2.08 sen in the previous year, its filing showed.

Revenue for the year stood at RM207.04 million, a 17.65% or RM31.06 million improvement over FY20's RM175.99 million.

For its fourth quarter ended Dec 31, 2021 (4QFY21), Maybulk reported a net profit of RM31.9 million from a net loss of RM49.78 million on the back of a 14.6% improvement in revenue to RM48.13 million from RM42 million a year prior.

EPS for the quarter amounted to 3.19 sen against a loss per share of 4.98 sen in FY20.

Maybulk said the positive results for FY21 were mainly due to "increase in operating profit, as well as non-recurring items of gain on disposal of property, plant and equipment, reversal of vessel impairments, and the gain on derecognition of a joint venture".

It said its operating performance was driven by a 111% jump in charter rates to US$18,092 per day in FY21 (FY20: US$8,566 per day) despite lower hire days of 2,372 days in FY21 (FY20: 3,848 days) from a smaller fleet size.

Operating expenses were also lower in FY21 according to Maybulk as it disposed of three vessels — total net proceeds of RM269.938 million which resulted in a total gain on disposal of RM98.009 million — as well as the redelivery of two chartered-in vessels during the year.

Maybulk added that it reversed an impairment loss of RM14.83 million compared with RM55.78 million on its vessels and right-of-use assets in FY21 while also recording a gain on derecognition of a joint venture of RM6.87 million and loss of liquidation of subsidiaries of RM539,000 in FY21.

Looking ahead, Maybulk expressed caution as the dry bulk shipping market has come off its peak since October in 4QFY21 as China's energy crunch started to ease following an increase in domestic coal production and the slowing down of industrial activities which reduced iron ore and coking coal imports.

"As such, the freight market experienced a significant drop in [4QFY21]. Despite the correction and the seasonal softness in [1QFY22] thus far, the overall outlook for the freight and second-hand ship market remains generally positive," its filing wrote.

Maybulk added that with limited fleet supply growth and near-term factors like port congestion, fleet capacity is expected to stay relatively tight while the overall supply-demand balance in the bulk carrier sector remains supportive with tonne-mile demand projected to grow by 2.2% in 2022 compared to fleet growth of 2%.

"However, there are other factors such as geopolitical instabilities, regional conflicts, trade wars and civil unrest that may impact the shipping market this year."

Maybulk shares were higher by two sen or 3.85% at 54 sen at Wednesday (Feb 23) market close, giving the dry bulk carrier a market capitalisation of RM540 million based on one billion outstanding shares. It currently trades at 4.87 times earnings and 1.25 times its book value.