INTERVIEW: Monjasa Sees Further Volumes Growth and Staff Expansion in 2024

Knudsen was appointed to the role of group CFO in January 2022. Image Credit: Monjasa

Global marine fuel supplier and trading firm Monjasa is expecting possible further growth in global bunker volumes this year, as well as taking on more staff, after the company saw record volumes and the second-best profits in its history in 2023.

The firm saw a profit of $109 million for 2023, down by 36.3% from the previous year's record, while its volumes gained 2% to 6.5 million mt.

"What we saw across our business in 2023 was a very strong development; you see that especially across our focus areas of physical [supply], but also across our reselling business," Rasmus Knudsen, group CFO at Monjasa, said in an interview with Ship & Bunker.

"!t's a pattern of strong performance across the group." 

Prospects for 2024

After coming down from 2022's record profits in 2023, the company now foresees either stability or modest gains this year.

"Our position is that, as we've seen in previous years, the bunker volumes will develop together with the global economy, and that means we expect that the bunker market will be stable, or maybe with a slight increase in volumes, with all the uncertainties and the challenges from the geopolitical instability and economic volatility that have become the new normal over recent years," Knudsen said.

"When we look at it as Monjasa, we remain committed to delivering a strong quality service to our customers, and we believe that if we continue focusing on that in 2024 we will be able to continue to deliver a positive development both in terms of volume and profitability. At least compared to the years prior to 2022 and 2023."

Spending the Money

When it comes to reinvesting its profits, Monjasa remains committed to organic growth, according to Knudsen.

"Our focus is to continue improving our maritime services, and we have invested quite significantly in expanding our fleet during 2023," he said.

"We'll be utilising some of the financial strength that we've built to continue down that path also in 2024.

"But we don't have any intention to invest in other companies through classic M&A activities."

In November the firm added two tankers to its West Africa operation, one of which, the Monjasa Leader, will be used as floating storage and is now the largest vessel in its fleet.

The company saw an average growth of 27% in staff headcount across its five regions in 2023. A further increase is likely this year, Knudsen said.

"If we look away from the fact that we sold RelateIT, the IT consultancy group owned by Monjasa Holding until late last year, then yes, we do expect organic growth in the number of employees," he said.

Shifting Demand Patterns

Two key waterways are currently preoccupying the bunker industry -- the Suez Canal, where transits have been cut sharply by attacks near Yemen prompting ships to avoid the area, and the Panama Canal, where a lack of water has reduced transit capacity.

The Red Sea situation's effect on Suez is resulting in both demand rises and falls, depending on which market you look at, Knudsen said.

"It is creating changes in the demand that we see in the market," he said.

"We see increased activity in West Africa, we see increased activity in the UAE and Singapore.

"But we also see [downward] pressure on activity in other regions, such as the Red Sea and the Mediterranean."

The impact in Panama is more negative, but Monjasa has room to maneuver depending on which direction the market takes this year. Balboa was Monjasa's largest supply area in 2023.

"It is impacting the business," Knudsen said.

"When we look at the market overall in Panama, the majority of the bunker deliveries are made to ships that either will or already have passed the canal, so that means the market is significantly impacted by the decrease in daily passages.

"What we've done is to remain flexible.

"We have a lean set-up in Panama, which has allowed us to be profitable throughout the decrease in demand, hold on to our market share and even build it.

"And we are flexible enough to further adjust with the market, up or down, as it develops further this year."

Alternative Fuels

Monjasa is also steadily preparing to be involved in alternative bunker fuel markets as GHG regulations push more shipping companies in this direction.

In 2023 the company launched a partnership aimed at promoting green ammonia availability in Northwest Europe. Monjasa also secured ISCC certification for biofuel supply in various locations, and established a biofuel supply chain in Cartagena.

One question hanging over these markets is whether bunker firms will be able to command similar margins in percentage terms on the new fuels as they currently do with conventional bunkers. If they can manage that, a significant rise in profits will come as these fuels cost so much more.

"It's too early for us to be specific on what financial performance we expect when selling alternative fuels; they account for a limited proportion of our total sales for now," Knudsen said.

"What we do believe is that if we continue investing in our ability to provide a quality service for our customers, and to provide industry-leading logistics, then we will be able to remain profitable when delivering low-carbon fuels."