Bahri Q2 profit up 48% on improved shipping rates

Bahri Sees 48% Surge in Q2 2024 Profit Due to Enhanced Shipping Rates and Fleet Management

Saudi Arabia’s prominent shipping corporation, Bahri, has reported a remarkable 48 percent increase in its net profit for the second quarter of 2024, reaching SAR733 million ($195.4 million). This impressive profit growth is largely attributed to improved shipping rates and strategic enhancements in fleet management. The substantial rise in profitability highlights Bahri’s effective strategies and its ability to capitalize on favorable market conditions.

Detailed Financial Performance

Revenue and Profit Growth

In the second quarter of 2024, Bahri’s revenue escalated by 15 percent year-on-year, totaling SAR2.7 billion. This revenue boost is primarily driven by a significant increase in the chemical sector’s revenue and higher contributions from the dry bulk segment. The company’s net profit for the first half of the year also experienced a robust 20 percent increase compared to the previous year, reaching SAR1.2 billion. This profit expansion was fueled by margin improvements, thanks to better cost efficiencies and elevated shipping rates for oil and chemicals.

Oil Transport Business Resilience

Despite experiencing some revenue softening, Bahri’s oil transport segment demonstrated resilience. The sector contributed to a 13 percent year-on-year growth in EBITDA. This performance is attributed to enhanced operating efficiencies within the oil transport division. CFO Basil Abulhamayel emphasized that the oil transport segment maintained its strength, showcasing the company’s capability to sustain profitability through operational improvements.

Capital Expenditure and Financial Metrics

Investment in Fleet and Infrastructure

During the first half of 2024, Bahri allocated SAR1.5 billion towards capital expenditures, marking a 12 percent increase from the previous year. This investment is indicative of the company’s commitment to expanding and modernizing its fleet and infrastructure. Such strategic investments are essential for maintaining operational efficiency and supporting future growth.

Net Debt Reduction

The company’s net debt stood at SAR5.7 billion, reflecting a 15 percent reduction compared to the previous year. This decrease in net debt highlights Bahri’s improved financial health and effective debt management strategies. The reduction in net debt enhances the company’s financial stability and flexibility.

Cash Flow and Working Capital

Bahri’s cash flow for the first six months of 2024 was SAR227 million, a decrease from SAR621 million during the same period the previous year. The decline in cash flow was primarily due to a cyclical increase in cash funding required for working capital. This rise in working capital needs offset the additional cash generated from higher earnings and increased capital expenditures. Despite the decrease in cash flow, the company’s overall financial performance remains strong.

Fleet and Operational Overview

As of June 30, 2024, Bahri’s fleet included 88 owned vessels, 16 vessels under lease agreements, and one floating desalination barge. This extensive and diverse fleet allows Bahri to effectively manage its shipping operations across various sectors and regions. The fleet’s versatility supports the company’s operational efficiency and ability to meet market demands.

Strategic Outlook

Bahri’s impressive 48 percent profit increase in Q2 2024 underscores the company’s successful navigation through the dynamic shipping industry landscape. The company’s strategic focus on optimizing fleet management, enhancing operational efficiencies, and leveraging favorable shipping rates has significantly contributed to its financial success. Bahri’s ongoing investments in fleet expansion and infrastructure development position it for sustained growth and profitability in the coming years.

Bahri’s Q2 2024 financial results highlight its strong performance and effective management in a competitive shipping market. The company’s substantial profit growth, reduced net debt, and strategic investments reflect its robust operational strategies and financial health. As Bahri continues to expand its fleet and optimize its operations, it is well-positioned to achieve continued success and growth in the global shipping industry.