KUCHING: Harbour-Link Group Bhd
has committed a capital expenditure (capex) of RM100mil for the purchase of container vessels and material handling equipment.
The Sarawak-based shipping and integrated logistics provider has procured two container vessels and expects to take delivery by this month. The two container vessels will replace the older ones under the company’s fleet renewal programme.
“Thereafter, we shall expect to operate a regular sailing schedule and manageable repair and maintenance costs,” Harbour-Link said in a statement.
Currently, the company operates a fleet of 13 container vessels, with a total capacity of 6,150 twenty-foot equivalent units.
The fleet, according to company chairman and group managing director Datuk Yong Piaw Soon, is the ideal size that corresponds to the existing demand of the company’s niche market within its achievable high rate of utilisation.
Harbour-Link provides container shipping liner services within the Malaysia and Intra Asia market.
The group has operation offices in Penang, Port Klang and Pasir Gudang (Peninsular Malaysia), Kuching, Sibu, Bintulu and Miri (Sarawak), Kota Kinabalu, Tawau and Sandakan (Sabah), Singapore, Brunei, Hong Kong and China.
Harbour-Link also deploys four sets of tugboats and barges for the transportation of timber products, mainly sawn timber and round logs, servicing Vietnam, the Philippines and Thailand.
In the nine-month period to March 31, 2024, Harbour-Link’s shipping and marine segment generated a revenue of RM425.9mil and net profit of RM46.7mil, which were 11% and 56% lower as compared to RM480.5mil and RM107.2mil respectively in the corresponding period in 2023.
The reason for the significant decrease in profits was due to freight rates’ downward fluctuation because of over-capacity in the market, said the company when releasing its latest financials recently.
However, in the January-March 2024 quarter, the shipping and marine segment’s revenue surged 13% to RM141.7mil from RM134.8mil in the corresponding quarter in 2023, but its net profit dropped by 22% to RM18.8mil from RM24.2mil.
Harbour-Link had said earlier that the Intra-Asia regional containers freight rates had been having large downward adjustments since November 2022 due to the increasing container tonnage capacity deployed by the main operators into the region.
Going forward, Harbour-Link sees promising prospects. “Malaysia’s domestic container shipping has stabilised during the first quarter of 2024 and is expected to remain favourable in the coming quarters. We may enjoy higher load factors and stable freight rates.”
The company said freight rates from Intra-Asia to the Sabah and Sarawak market were steady, with high utilisation rates.
“We expect container shipping activities to be satisfactory in the coming quarters. Moreover, our business activities in the shipping agency section will also continue to be active,” said the company.
Harbour-Link said it had secured new contracts for project cargo handling in Bintulu and third-party logistics work for the oil and gas industry.
To cater for the increase in cargo volume, the company said it will procure more transport vehicles and other material handling equipment.
