Maybulk ... May 09

MALAYSIAN BULK CARRIERS (MAYBULK) expects to remain profitable for 2009 despite poor prospects for the shipping industry due to slower global trade and lower charter rates.

SHIPPING PROSPECTS POOR
" .... The shipping prospects are very poor. But I hope we won't be at a loss. I don't think we will be at a loss. We should be able to make a profit because our cost is low ...." said MAYBULK Executive Chairman - TEO JOO KIM to the press after its AGM on Apr 22, 2009.

CEO - KUOK KHOON KUAN added that the current market was difficult with new building of ships and contracts being cancelled, old ships scrapped and cargoes deferred adding that the slow global trade and difficulty in getting loans added to the gloomy shipping landscape. " .... We, as a part of the service sector, don't have cargo to ship because people couldn't get loans to ship. Furthermore, the tanker and the dry bulk markets are oversupplied ...." he said. He further said that " .... Right now, it would be better if you have contracts at the old prices. But then, you will have a lot of problems with renegotiations. A lot of other shipping companies had beautiful contracts but their clients went bankrupt and so they can go bankrupt as well .... We expected problems. This was why we started selling ships a few years ago (when rates were high). When we sold the ships, that was equivalent to three years of high charter rates ...." KUOK said.

BALTIC DRY INDEX PEAKED IN MAY 2008
The Baltic Dry Index (BDI) began 2008 at 8,891 points and peaked at 11,793 points in May. The BDI collapsed to 663 points last Dec 2008.

" .... I don't think it will come down to as low as last year's (2008). Now it is at 1,700, it is barely comfortable because our cost is low. The BDI will likely fluctuate between the low of 1,000 and 2,000 for this year (2009). But don't expect the market to shoot up ...." TEO said.

The Company sold two bulk carriers, a tanker and an accommodation vessel last year (2008).

CASH BALANCE AT RM805M AS AT DEC 2008
As at Dec 31, 2008, MAYBULK's Cash Balance was RM805.6m. For FY08, the Company registered a Net Profit of RM521.7m, 9.7% lower than the RM577.8m posted in FY07. Revenue, however, rose 18.6% to RM721.2m.

INVESTMENT IN PACC OFFSHORE BEARING FRUITS
TEO also said its investment in PACC OFFSHORE SERVICCES HOLDINGS pl (POSH) was bearing fruits. " .... POSH continues to be profitable and hopefully the offshore market will stay reasonably good at this level. Then we should do quite well. So far, for the first quarter, POSH has been okay. The diversification of cash into POSH so far, is better than staying in dry bulk ...." TEO said.

ON ACQUISITION TRAIL
MAYBULK is also looking at acquisitions during these times as the second-hand vessels market has dropped by some 60% to 70% from its peak.

" .... If anything, we are looking at buying vessels rather than disposing of them. There are opportunities at this point in time to buy ships because they will be very cheap. But we have to manage expansion and opportunities in today's market with shareholders' expectation on dividends ...." KUOK said.

CHAIRMAN EXPLAINS HIS DISPOSAL OF SHARES
TEO explained that his recent disposal of shares in the Company was merely motivated by investment needs and not a sign of him exiting the Company. " .... The move was to re-profile my investment portfolio. I have no more shares in the Company. But in this market, with the current economic situation, cash is more important. I am not leaving the company .... If the market and economy start to grow again, then it is the time to reinvest ...." he said, adding he may buy back shares then. (Ed's notes - quite some confidence boosting).