Oil and chemicals trading and logistics firm Titan Petrochemicals Group plunged into a net loss last year on the back of lower tanker rates, higher fuel costs and lower trading margin.
The company, 13.25 per cent owed by United States-based private equity firm Warburg Pincus, yesterday posted a HK$29.1 million net loss, compared with a profit of HK$100.33 million in 2006.
That was despite a HK$262 million gain from crude tankers disposals. Gross profit slid 31.14 per cent to HK$456.60 million.
Titan's transportation operation was the worst performing, with a 71.2 per cent plunge in operating profit to HK$128.25 million excluding the disposal gain, due to a 20 per cent rise in fuel costs and lower freight rates amid ample tanker supply.
The company's strategy to gradually sell down its tanker fleet also cut transport profit. After selling two vessels in the first quarter, Titan owns seven vessels, which it plans to either sell or convert into oil production or refuelling vessels by 2010 when single-haul vessels must be phased out.
Operating profit from oil products supply and bunkering refuelling tumbled 27.8 per cent to HK$54.2 million.
Its margin was squeezed to 0.34 per cent, from 0.76 per cent in 2006, after a spike in oil price damped buying interest in the fourth quarter.