Bahri Annual Report-2009

Chairman’s Message

Dear Shareholders

On behalf of myself and the members of the Board of Directors, I am delighted to submit the annual report for the fiscal year 2009, which includes the operational results of the company, its achievements and the most important results and goals achieved. As shown in the company’s financial statements, NSCSA has achieved a net profit of SAR (369) million during the fiscal year 2009. As you are well aware, 2009 was a difficult year for the global economy in general and the shipping industry in particular. However, despite the repercussions of the global financial crisis, the company was able to overcome the difficulties it encountered in the course of the year. NSCSA met with the challenges which it had confronted and the changes brought about by recession in world trade and its impact on the shipping industry, and achieve positive results compared to the performance of international maritime transport industry in general. During 2009, the overall strategic plan adopted by the company’s Board of Directors in late 2008 was implemented. This strategic plan emphasized the importance of continuing the company’s expansion and growth at various levels of corporate activities, in addition to monitoring the status of the markets and seeking opportunities to expand its current activities. Other viable options are to engage in relevant investment activities and capturing available opportunities, based on valid results of economic feasibility studies, rewarding returns and relevance to the company’s competitive edge. To accommodate expansion requirements and new activities in an effective and smooth manner while maintaining the company’s efficiency in the performance of its operations, it was imperative to restructure and develop the company’s management systems and improve corporate methods of control, evaluation and follow-up. With respect to crude oil transport sector, NSCSA took delivery of four VLCCs during the fiscal year 2009, bringing the fleet to (17) VLCCs, with a total capacity of 5.26 million DWT. Additionally, a Murabah contract has been signed with the Public Investment Fund to finance a part of the cost of eight VLCCs , for an amount of SAR 1,050 billion (one billion and fifty million Saudi Riyals).

In line with NSCSA’s strategy regarding petrochemical transportation, National Chemical Carriers Co. Ltd. “NCC” (80% NSCSA-owned subsidiary) sold (3) chemical tankers that were approaching the end of their virtual trading life, leased (3) other carriers under a bareboat contract and reviewed the lease contracts of certain chemical tankers, leaving a positive impact on the company’s results of operations for the fiscal year 2009. To enhance its trade and operational capacity, in 2009 NSCSAhas incorporated NCCOdfjell, a limited liability company based in Dubai, owned equally between the National Chemical Carriers Company and Odfjell International Company. This company will operate chemical tankers in the pool business between the two parties. The company commenced its operations in early 2010, aimed to manage a joint fleet that, God willing, will consist of no less than (31) tankers in the course of the coming three years after NCC takes delivery of (16) new contracted tankers, subject to increase depending on the increase of Odfjell’s fleet in the new company. In the area of general cargo transportation, NSCSA has entered into contract with an internationally renowned consulting firm specialized in this area to conduct a feasibility study on general cargo market and submit the necessary recommendations on the company’s current fleet which is approaching the end of its useful life, and to recommend either to build or buy general cargo vessels to replace the current fleet whereby the Board of Directors will decide whatever deemed appropriate in this regard based on the recommendation of the consulting firm.

In 2009, a memorandum of understanding (MOU) was signed between the National Shipping Company of Saudi Arabia and the Arabian Agricultural Services

Annual Report 2009 The National Shipping Company of Saudi Arabia


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