Gulf Navigation ship purchases

[sharewadi]

Gulf Navigation (GULFNAV) is apparently interested in buying more boats. But why would they? Is there sufficient demand for shipping services for Gulf Nav to generate a profit from a bigger fleet?

Bloomberg 29 August 2010:

Gulf Navigation Seeks Oil Tankers as Economy Recovers, CEO Says By Anthony DiPaola Gulf Navigation Holding PJSC (GULFNAV), Dubai’s only publicly traded oil-tanker owner, is seeking to buy new crude carriers as an improving global economy boosts shipping volumes, the company’s chief executive officer said. Gulf Navigation may acquire two very large crude carriers, or VLCCs, this year, Per Wistoft said in an interview Aug. 26. Oil output that’s set to rise by 2011 will bring enough added crude supply onto the market to necessitate 45 more VLCCs, Wistoft said in Dubai. “If the price is right we can buy ships tomorrow,” Wistoft said. “I’d probably like to see another two VLCCs come into the fleet,” with delivery of the vessels before 2013, he said. A VLCC can haul 2 million barrels of oil. The company is on target to ship 6 million tons of goods this year, compared with 4.5 million tons in 2009, he said. That increase is a result of a stronger economy, which will “definitely” raise profit this year, he said. The global economic crisis hurt shipping companies as demand for goods declined and previous orders for tankers brought too much supply to the market. Gulf Navigation, which this year canceled orders for some ships whose delivery had been delayed, reported an 82 percent slump in 2009 net income. Rates for shipping crude from the Middle East to Asia, the busiest route for supertankers, have fallen this year as there are still too many new ships coming to market.

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