Despite the challenging market conditions Nakilat, the shipping arm of Qatar’s liquefied natural gas (LNG) sector, ended 2016 with a net profit of QAR 955 million (USD 262.2 million) as the company’s long-term contracts continued to underpin its strong financial performance.
The result represents a decrease of 2.9 percent compared to a net profit of QAR 984 million (USD 270.2 million) seen in 2015.
“Given the downturn in market conditions, the company is pursuing a prudent and balanced strategy of strengthening its balance sheet, capitalizing on profitable business growth, and achieving cost consolidations,” Nakilat said.
The company added that the decline in oil and gas prices and overcapacity in the shipping industry has placed a downward pressure on the shipping markets and asset prices.
Therefore, the Board of Directors recommended distributing a cash dividend to the shareholders equal to 10% of the nominal value of its capital.
Nakilat said that its approach to its dividend disbursement “would enable the company to continue to maintain a strong balance sheet and stable cash flow to support its debt repayment structure and remain resilient in the current volatile market environment.”
Earlier in February, the company’s subsidiary Nakilat Shipping Qatar Limited (NSQL) assumed full ship management and operations of a Q-Max LNG carrier Al Dafna from Shell Trading and Shipping Company Ltd.(STASCo), the fifth vessel management transferred as part of the planned and phased transition agreed in October 2016 between NSQL and Shell.
Under the deal, the management of a total of 25 LNG vessels, including fourteen Q-Max and eleven Q-Flex LNG carriers, will be transitioned from Shell to NSQL.