Milaha H1 profit down 15% but still a 'healthy' $151m

Qatar Navigation (Milaha) has reported a 15% dip in net profit for the first half of 2016 on the back of pressures on its investment arm, general cargo and ro-ro businesses and the “extremely challenging” offshore market.

However, president and ceo Abdulrahman Essa Al-Mannai has hailed Milaha’s “healthy results supported by a strong balance sheet” after the announcement of the QAR553m ($151.8m) result, down from QAR651m for the corresponding period last year.

Operating revenues of QAR1.387bn for the six months ended June 30, 2016 where down 7.9% from QAR1.507bn for the same period in 2015.

Continued volatility in the oil and gas market saw Milaha Offshore’s revenue decline by 12% amidst “the extremely challenging offshore business environment”, which has hit companies across the sector. The drop in revenues came despite cost saving measures that had “significantly reduced” operating expenses.

Milaha’s Maritime & Logistics arm saw a 7% decline period-on-period despite an increase in container volumes.

“Port Services was negatively impacted by lower ancillary services revenue and non-containerized general cargo and eo-eo. In addition, pricing pressures faced by the container shipping unit dampened the unit’s results,” Milaha said in a statement.

Milaha Capital, the company’s investment arm, saw a 25% dip in revenue, pinned to lower dividend income and continued volatility in the local equity market. Meanwhile, Milaha Trading was impacted by lower heavy equipment sales related to a slowdown in construction activities, the statement said.

The one bright spot was Milaha Gas & Petrochem where revenue grew 56% despite a global slowdown in the shipping market. “The investment in two LNG carriers made in the second half of 2015, and the mid to long-term nature of the majority of charter contracts, largely insulated this segment during the first half of 2016,” it said.

Sheikh Ali bin Jassim Al Thani, chairman of Milaha’s board of directors said Milaha remained focused on its long term strategy despite the short-term headwinds.

“Despite a slowdown in some of the business segments in which we operate, our results remain strong. The foundation we have laid in the past few years will not only enable us to withstand any headwinds, but also position us for sustainable future growth,” he said.