Marine & General optimistic about downstream prospects

KUALA LUMPUR: Marine & General Bhd is optimistic about its long-term prospects, particularly for its downstream division.

The company said there was continued long-term demand for the transportation of liquid bulk petroleum and petrochemical products.

“Correspondingly, the demand for clean petroleum products and chemical tankers, which is a critical logistics component of the petroleum and petrochemical distribution network, is expected to remain robust,” the company said in a statement yesterday.

Nevertheless, Marine & General said as oil prices had fallen significantly since 2014, there was a move towards cost rationalisation within the industry, which might result in weaker revenue performance ahead.

“Despite the improvement in world crude oil prices, actual activity remains muted. There are no clear indicators from major oil producers on increased spending, particularly in upstream,” it said.

As such, the company would continue to focus on cost optimisation and stringent cash flow management.

Marine & General reported a pre-tax loss of RM368 million for its financial year ended December 31 last year, on the back of RM152.1 million revenue.

It said operating conditions for the marine logistics of the upstream division, spearheaded by Jasa Merin (Malaysia) Sdn Bhd, remained challenging.