Annual Report 2017
110
111
6 Bahri Finance Division
Bahri’s 2017 Financial Performance & Comparison with 2016 Revenues and net income decreased in 2017 compared to 2016 due to decreases in global shipping rates that were affected by global economic performance, decreases in the level of trade exchange and a global decline in imports and exports, especially crude oil and its derivatives. Shipping rates were furthermore affected by supply and demand of crude oil and its derivatives, number of available carriers and volume of shipping capacity added to maritime transport sector versus exclusion of shipping capacity. 2017 was characterized by a surplus in maritime shipping capacity due to the introduction of a large number of ships with decreases in the number of excluded vessels. This in turn led to reductions in maritime transport rates. The increased cost of ship fuel placed even more pressure on operational income and profitability. Increases in the Company’s fleet and growth in the logistics sector, however, mitigated the effects of the decline in maritime transportation prices, boosting Bahri’s performance. Furthermore, financial results nevertheless exceeded expectations compared to other global transport and shipping companies. The Company currently owns 88 ships including 41 VLCCs, making Bahri the largest global operator of VLCCs. Furthering the leadership role of the company and in line with its strategic plans for business and income diversification, Bahri has entered into a partnership with the International Marine Industries Company that will lead to the construction, development and operation of an international maritime yard at the King Salman International Complex for Maritime Industries and Services in Ras Al-Khair. This company will build and maintain various kinds of ships including VLCCs. Bahri established BahriBolloré Logistics company in 2017 that will provide logistical services and also set up BahriBunge Dry Bulk Ltd.
Graph 2 – Efficiency Despite decreases in global transportation rates, the Company was able to achieve good financial results and continue delivering excellent net income and financial indicators in 2017 compared to other transport and shipping companies and with consideration to the difficulties and challenges faced by the maritime transportation sector over the year. The Company’s strategy has contributed to business diversification and fleet expansion in addition to long-term partnerships with strategic customers and enhanced operation efficiency through positive financial results. Furthermore, achieving a healthy financial position and high level of solvency will enable the company to continue pursuing its investment and strategic plans.
125,00 100,00 Efficiency
0,00 25,00 75,00 50,00 25,00
Graph 1 – Consolidated Cashflow
2013
2014
2015
2016
2017
Cash Flows
Operating Profit Margin Return on Assets
Profit Margin Before Depreciation and Financing and Zakat Costs Return on Total Equity
Return on Sales Return on Equity
4,000,000
Revenue Growth Rate
2,000,000
Efficiency
2017
2016
2015
2014
2013
%
13.34
Return on sales
25.77
24.35
14.72
26.43
Profit margin before de- preciation and financing and Zakat costs Operating Profit Margin Return on Shareholders Equity Return on Total Equity
2,000,000
%
35.71
42.18
39.34
35.31
46.79
% % % % %
20.00
28.19 18.08 17.35 8.40 -9.05
28.41 19.58 18.74 9.52
18.69 6.83 6.52 3.12 27.39
30.30 12.87 12.16 6.26 15.50
4,000,000
2013
2014
2015
2016
2017
8.49 8.13 3.81
Net cash from financing activities
Net cash from investing activities End of trading period cash and cash equivalents
Net cash flows from operating activities
Net difference in cash and cash equivalents
Return on Assets
Cash Flows 2013 - 2017
Revenue Growth Rate
-10.94
105.83
(SAR “000”)
2017
2016
2015
2014
2013
Net cash flows from operating activities Net cash from investing activities Net cash from financing activities Net difference in cash and cash equivalents Cash and cash equivalents at the end of the year
1,123,419
2,187,733
2,923,047
940,856
644,771
- 1,616,669 - 2,008,035 - 1,629,098 - 3,474,732
- 769,881
- 396,302
660,433
464,426
2,577,618
74,210
- 889,552
840,131
829,523
43,742
- 50,900
1,190,441
2,079,993
1,142,831
313,308
269,566
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