Maybulk Warns of Major Loss amid Dire Market Conditions

Maybulk Malaysian Bulk Carriers Berhard (Maybulk) has issued a profit warning claiming it expects to record a substantial loss for the fourth quarter of 2015 and the financial year ended 31 December 2015. The losses are mainly attributable to the dry bulk market which continues to be weak and it is uncertain when the market will recover, the company said. The group has reviewed its non-cancellable operating lease contracts for the chartered-in vessels and based on a preliminary assessment, the charter-in costs are higher than the current and likely market rates. Hence a provision for onerous contracts has to be made, Maybulk said. In addition, the company reported impairment of investment in associate PACC Offshore Services Holdings Ltd (POSH) which has been hit hard by the impact of depressed crude oil prices on the global offshore marine industry. Maybulk said that following a preliminary assessment of its investment in POSH, it has concluded that the fair value of the investment is likely to be lower than the carrying value and an impairment loss provision has to be made. While the amount of the impairment is yet to be determined, it is expected that this will have a significant adverse impact on the financial results of the group for 4Q2015 and FY2015, Maybulk added.