Monjasa: We Have Adjusted to the New Normal in Global Shipping

Monjasa says it has "adjusted to the new normal in global shipping" Image Credit - Monjasa

Monjasa Holding A/S (Monjasa) today said, following the "extremely challenging year" for the global oil and shipping industries and its own "very unsatisfying" result for 2016, the bunker supplier is already seeing positive results in 2017 having adjusted its business for the "new normal in global shipping."

"Like the majority of our competitors and customers, we can conclude that 2016 was an extremely challenging year in global shipping. Therefore, we have been working very focused on optimising our core business and adjusting to the new normal in global shipping with lower margins in all our primary markets," Monjasa Group CEO Anders Østergaard said in comments alongside the release of the Group's 2016 annual report.

"It is difficult to protect oneself against a global shipping crisis which was further worsened in 2016 with a downward trending demand for transportation of goods, a widespread overcapacity, and a ruined offshore sector because of the very low and continually decreasing oil prices.

"Therefore, I concentrate on the fact that we present a positive result in this year's First quarter, despite the very unsatisfying result in 2016. This demonstrates that our core business is healthy and that the many proactive adjustments we have put in motion are paying off."

For 2016 Monjasa said it was expecting a decrease in revenue to $1.2 billion (compared to $1.6 billion last year) primarily as a result of a 19 percent decrease in oil prices, and a net result of $-26 million USD (compared to $24 million last year).

Volumes witnessed a "modest decrease" from 4.1 million tonnes to 3.8 million tonnes, the supplier added.

In terms of optimizations made to the business, the company says it has adjusted the size of its fleet from 26 to 20 tanker vessels "to match the current market demands" while credit agreements and oil storages have been "significantly optimised" with a total reduction in working capital of $75 million.

"The company can already at this point show positive net results for the first quarter of 2017. At the same time, Monjasa Holding A/S presents a high solvency ratio of 36% and a consolidated equity of 113m USD in the annual report," said Monjasa.

"Despite the historically weak shipping markets, the Monjasa Group continues its investments in e.g. digital compliance systems for screening of all counterparts. Also, to further push for increased HSEQ efforts the Monjasa Group, as the world's first bunker company, has obtained upgrades to the latest standards of ISO certifications (ISO 9001:2015 and ISO 14001:2015) in Quality Management and Environmental Management."