Q2 results buoyed by oil, chemicals segments’ strong performance: Bahri CEO

Ahmed Al Subaie, CEO of National Shipping Company of Saudi Arabia (Bahri) 

Ahmed Al Subaie, National Shipping Company of Saudi Arabia’s (Bahri) CEO, said the exceptional Q2 2024 results were driven by the strong operational performance of the company’s various business divisions.

In an interview with Argaam, Al Subaie pointed to the robust performance of the company’s oil and chemicals shipping segments, being the two largest contributors to its second-quarter revenues.

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In addition, the contribution rate of Bahri’s dry bulk and integrated logistics segments improved during the same period.

Bahri’s strong second-quarter results, according to the top executive, were fueled by enhanced fleet management and shipping efficiency, thanks to increased revenues from the chemicals shipping segments, paired with the elevated contribution of the dry bulk and integrated logistics segments.

This is in addition to the favorable supply-demand dynamics in the oil and chemicals shipping segments, alongside larger chemicals and dry bulk volumes transported, and increased logistics transactions in Q2 2024 versus Q2 2023.

The chemicals shipping sector achieved a 39% year-on-year (YoY) revenue rise during the second quarter of 2024 to reach SAR 920 million. This strong growth was mainly driven by time-chartered vessels and improved freight rates amid tight supply-demand dynamics, coupled with cost savings from fleet scheduling optimization, the CEO added.

Under the company’s strategy to address opportunities of favorable short- to medium-term market conditions amidst the relatively high cost of purchasing vessels, its chemicals shipping segment has leased six chemical tankers and ramped up chartering-in arrangements in H1 2024. An 18-year-old vessel was written off at a book value gain of SAR 47 million, with three more planned for disposal in H2 2024.

Al Subaie pointed out that global geopolitical tensions are one of several downsides to doing business, reflected in freight rates. However, the company's strategic plans include multiple complex scenarios tailored to address potential fluctuations in shipping prices.

On the other hand, changes in global trade patterns have not severely affected Bahri Dry Bulk as it supplies world nations with their basic food, energy and infrastructure bulk-cargo needs. The CEO also noted that Bahri Dry Bulk adopts a well-crafted diversified fleet employment strategy that covers the spot market, contracts of affreightments and time-charter agreements.

Bahri Dry Bulk witnessed an 83% YoY hike in its Q2 2024 top line, buoyed by higher shipping volumes, which were met using the business division’s owned fleet of owned vessels and chartered vessels contracted mainly on a commission or relet basis.

Al Subaie highlighted that Bahri Dry Bulk intends to expand its current fleet of 11 vessels to seize promising long-term growth opportunities in the dry bulk transportation market and boost profitability. However, it expects to bridge short-term gaps between customer needs and owned tonnage through the disciplined acquisition of tonnage from the market.

All in all, Bahri endeavors to conclude promising strategic partnerships and capture the available opportunities aligning with Saudi Vision 2030. The company aims to provide all the necessary support to develop the Saudi maritime transport system, the top executive underlined.

According to data available to Argaam, Bahri reported a net profit of SAR 1.18 billion in H1 2024, up from SAR 987.8 million in the year-earlier period. The second-quarter earnings amounted to SAR 733.2 million.