By GMM News | 2024-09-09 | International Shipping News |

The National Shipping Co. of Saudi Arabia, or Bahri, attributed a 15% year-on-year increase in revenue in the second quarter to better oil and chemicals shipping rates and larger chemicals, dry bulk and logistics volumes, it said in second quarter results released July 28.

Oil prices were up

Oil prices were up in the second quarter. Dated Brent prices averaged $84.97/b in the second quarter of 2024, up from $83.16/b in the first quarter, according to assessments by Platts, part of S&P Global Commodity Insights.Bahri is one of the world’s largest owners and operators of VLCCs, with a fleet of 88 vessels. It carries out the purchase, sale and operation of ships transporting oil, refined products, chemicals and dry bulk.

Bahri revenue totaled Riyals 2.71 billion ($722.67 million) in the second quarter. Its revenue in the first half of 2024 was up 6% on year to Riyals 5.03 billion, the company said.

“Our success was driven by optimized fleet management and route efficiency, supported by improved market conditions for VLCCs and chemical tankers,” Bahri CEO Ahmed Ali al-Subaey said, according to a statement on the results.

Bahri is undertaking a fleet renewal plan, under which Bahri’s oil business took delivery of two modern second-hand eco VLCCs and divested one older VLCC in the first half of 2024. It plans to add another two modern second-hand eco VLCCs to its fleet in the second half of 2024.

Bahri’s oil operation also fitted scrubbers in two VLCCs, bringing the number of scrubber-fitted vessels in its fleet to 14.

The company completed its exit from the non-VLCC market by divesting its last product tanker in the first half of 2024.

The Bahr oil business’s primary cargo load region is the Persian Gulf market, but it is also present across all major global VLCC routes. It is the exclusive transporter of Saudi Aramco VLCC crude cargoes sold on a delivered basis around the world. Aramco holds a 20% equity stake in Bahri.

“We are happy to report strong earnings of (Riyals) 1.19 billion for the first half of the 2024, 20% higher than in the prior year. Our oil transport business remained resilient despite some softening in revenues to still contribute a 13% EBITDA year-on-year growth through improvements in operating efficiencies,” Bahri CFO Basil Abulhamayel said.

Chemicals boost

Bahri’s financial results were boosted significantly by its chemicals division. The company said its revenue. The increased by 39% on year to Riyals 920 million ($245 million).

The Bahri chemicals business leased six chemical tankers and increased chartering-in arrangements in the first half of 2024 to capitalize on favorable short to medium-term market conditions amidst a relatively high cost of vessel acquisition, it said. It disposed of an 18-year-old vessel and plans to dispose of three other vessels in the second half of 2024.

The Bahri chemicals business owns and operates tankers that transport chemicals, clean petroleum products, vegetable oils and biofuels globally. It operates on the spot market and in contracts of affreightment and time charter arrangements, as well as the sale and purchase of vessels.

Bahri’s development plans are part of Saudi Arabia’s plan to transform Saudi Arabia into a strategic regional hub for shipping and logistics.