Management Report
Financing and Investment
NSCSA pursues a conservative financial policy commensurate with the nature of its business and assets by financing assets in line with the useful life of these assets and the expected revenues, which led to flexibility in the cash flows that enabled the company to meet all its domestic and international obligations. By the end of 2009, total financing of the company’s assets reached SAR 4.8 billion. It is expected that financing will reach its maximum level of SAR 5.3 billion in 2010 before it starts to diminish gradually, depending on the current financial data.
Over the last five years, NSCSA has adopted a financing and investment policy compatible with the precepts of Islamic Shariah. As a result of adopting this policy, all company investments and 82% of its loans have been converted into Shariah-compliant instruments and God willing, the Shariah-compliant financing will reach 100% upon completion of the current outstanding conventional loans. NSCSA follows a conservative investment policy of its available cash funds in low-risk investments that are easy to liquidate when such funds are needed to finance corporate needs.
Murabaha financing and long-term loans balances
6,000
5 ٬ 439
5 ٬ 343
5,000
4 ٬ 765
4 ٬ 235
3 ٬ 709
4,000
3,000
2,000
1,000
0
2011
2012
2013
2014
2010
with the Public Investment Fund to finance part of the cost of eight VLCCs and to apply some of these financing funds for the payment of accrued debts and outstanding Murabah payments to commercial banks to finance VLCCs (Wafra, Dorra, Ghazal, Sahba) respectively under financing agreements with those banks.
NSCSA and its subsidiary, the National Chemical Carriers finalized in 2007 the financing arrangements for their investment schemes, duly signed in 2006 and in 2007. This was a long term financing facility that extended for (10) years from the date of receipt of the carriers, and such financing is in line with the dates of accrued payments for the respective dockyards. In 2009, NSCSA signed a Murabah financing contract
Financing in 2009
Loan balance at the beginning of the year
Change during the year
Loan balance at year end
Company
NSCSA
1,864,714 2,047,237
617,674 211,987
2,482,388 2,259,224
NCC
Mideast Ship Management Ltd.
23,351
)1,991(
21,360
Total
3,935,302
827,670
4,762,972
26
Annual Report 2009 The National Shipping Company of Saudi Arabia
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