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Sinotrans Plunges into Red

Sinotrans Plunges into Red
Sinotrans Shipping ended the first half of 2015 with $18.3 million net loss, as compared to $2.3 million net profit for the same period a year earlier, due to a dip in revenues from operations of the company’s dry bulk and container shipping segments.

The company’s overall revenue dropped by 19% to USD 485.1m, as compared to USD 601.6m revenue recorded in the first half of 2014.

Revenue from dry bulk shipping segment slid by 21.6%, from USD 315.1m in the 1H2014 to USD 246.9 in the half ended June 30, 2015, while revenue from container shipping dipped by 17.3%, from USD 286m to USD 236.7m.

The average daily charter hire rate/time charter equivalent (TCE) rate for dry bulk vessels was USD 8,122, as compared to USD 10,777 in 1H2014.

In the first half of the year, the company’s container shipping volume was 422,875 TEU, a slight increase compared to 417,282 TEUs shipped a year earlier. However, a positive impact of increased container volumes was offset by USD 31 dip in average income from single container.

During the first half of 2015, the company disposed of 15 aged dry bulk vessels, and also took delivery of one eco dry bulk newbuilding vessel with a capacity of 78,000 DWT. As at 30 June 2015, Sinotrans owned a fleet of 47 vessels with an aggregate capacity of 3.42 million DWT and an average age of approximately 7.9 years, a decrease of about 2 years as compared to the end of last year.

The company’s total controlled fleet included 103 vessels with an aggregate capacity of approximately 7.06 million DWT. In addition, Sinotrans also has a total of 9 newbuilding vessels with an aggregate capacity of 590,000 DWT, which are expected to be delivered from the second half of 2015 onward.

Looking ahead, Sinotrans expects the global economy to remain in weak recovery throughout the remainder of 2015, accompanied with downside risks and the divergence of economic development.

In the dry bulk shipping market, the company expects that the growth of seaborne demand will be stimulated by the relatively low prices of major commodities. Together with driving forces such as the seasonal factor, the dry bulk shipping market is expected to rebound from low levels.

In respect of tonnage supply, although the delivery of newbuilding vessels remains relatively small, the existing massive scale of capacity still needs to be digested, and thus the dry bulk shipping market is predicted to remain weak, says Sinotrans.

For the container market in the Intra-Asia area, the intense pressure of overcapacity will still exist. However, with the coming of traditional peak season and the strengthening alliance among shipping companies, Sinotrans expects that the pressure of supply-demand imbalance will be somehow eased. Therefore, it is predicted that the container shipping market of Intra-Asia area will remain in weak balance.

”In order to improve our performance, we will focus on the strengthening of cost control, persist to optimise the fleet structure, deepen the internal integration to obtain economies of scale, as well as seek for new opportunities. Our Group believes that, with above measures and our advantages of solid financial position, lower vessel costs, modern fleet, mature network and leading brand, we will further improve our market competitiveness and as always, strive for the maximisation of our shareholders’ interests,” Sinotrans says in its financial statement.


Source: http://www.turkishmaritime.com.tr

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