Four new very large crude carriers (VLCC) acquired by National Shipping Corporation of Saudi Arabia (NSCSA) will raise its VLCC fleet capacity to 2.7 million dwt with a carrying capacity of 19 million barrels of crude oil, the company reported.

The company also reported it had commenced a new service in 2002 by entering into the freight forwarding business.

Three of the vessels have already been delivered and the fourth will be received by the company in October, it reported. The tanker purchases were finalised in September of last year with builders Samsung Heavy Industries, Korea, delivering the first vessel, MT Harad in October 2001. The tanker was chartered out to Vela International, a subsidiary of Saudi Aramco.

The second and third VLCCs Ñ MT Marjan and MT Safwa Ñ were delivered in February and June this year respectively.

NSCSA made losses amounting to SR139.65 million ($37.24 million) after making an allowance of SR291.69 million for the sale and discontinued operations of three container ships and revaluation of assets.

"Before the effect of the discontinued container ship operations, the company's income for 2001 was SR177.32 million compared with a loss of SR33.02 million in 2000," NSCSA chairman Suleiman Jasir Al Herbish said.

Al Herbish said the company's five VLCCs' performance had peaked during the first part of fiscal year 2001 due to a rise in the freight rates of crude oil transportation. "However," he said, "the rates declined in the second half of the year due to various factors affecting the tankers' financial performance." The company said induction of new tonnage, lower demand worldwide because of recession and the lowering of freight rates were responsible.

The total gross operating profit from the transportation of crude oil was SR168.66 million

A net profit of SR13.15 million was realised in 2001 from chartering out the tanker Uqba Bin Nafi. Income from Arabian Chemical Carriers, an affiliate of NSCSA and owner of tanker Al Faabi, was SR6.32 million while income from another affiliated company, National Chemical Carriers, was SR53.16 million, as a result of which the company's total profits from the chemical tankers amounted to SR72.64 million. Total profits received by NCSA from the petrochemical sector in 2001 were SR110.023 million compared with SR58.93 million in 2000.

The operating revenue for Ro-Ro vessels in 2001 amounted SR387.41 million while operating expenses were 97 per cent of that. In 2000, the operating revenue had been SR405.97 million with operating expenses 112 per cent of that.

Container transportation witnessed fierce competition worldwide in general and in the Europe/Asia trade in particular because of supply of container ships overtaking demand. A global economic slowdown, particularly in the US, affected the demand situation and the freight rates. "The liner service of the National Shipping Company of Saudi Arabia was also affected," the company said.

NSCSA said an analysis had indicated that it would be strategically important to keep the Ro-Ro/break bulk liner service continued between the Middle East and the US East coast where the company had about 30 per cent of the share in the bulk cargo trade.

Among the highlights of the year was an expansion in the transportation of petrochemicals with NCC due to build four new petrochemical carriers.

Following a restructuring move in the liner sector, the container service for Europe-Middle East-Far East was closed and three container ships sold.

The company's London office was closed with its functions transferred to the Asia office in Singapore.

Four Ro-Ro vessels were sold - S Makka, S Riyadh, S. Shaqra and S Taif.

The Arabian Gulf-Indian subcontinent-Red Sea-Mediterranean-US/Canada East Coast- US (Gulf) service was restructured with four Ro-Ro vessels giving 21 days frequency.

Ship management services handled by Mideast Ship Management Limited (MSML) Dubai were expanded. A contract was signed with Sabic for the management of two of its petrochemical carriers Noor Jubail and Noor Yanbu, bringing the total number of vessels managed by MSML to 25.