23SEP2019 - NEWS - Straits Inter Logistics structuring bunkering business for growth

Straits Inter Logistics Bhd’s (SIL) new venture into marine fuel oil (MFO) bunkering services is a game changer for the company.SIL is also in an entrenched position to capture increasing marine gas oil (MGO) demand from higher offshore support vessel utilisation in Malaysia from the second half of 2019 (2H19) and into 2020.SIL’s share price has yet reflected its strong earnings visibility at only 7.2 times financial year ending Dec 31, 2020 (FY20) price-to-earnings ratio.Following from a recent meeting, the management shared that the average utilisation of its total capacity of 12 million litres was about 40% in 1H19, still in line with our estimate of 44% for this year.
The management is also keen to complement and diversify away from its single product risk — MGO for oil and gas (O&G) customers — by venturing into MFO bunkering services.