THE world's second-largest container manufacturer, Singamas, posted a first-half profit of US$17 million compared with a loss of $37 million from January through June in 2016 on 31 per cent higher revenue at $577 million, driven by rising container demand.
The Hong Kong-listed company sold 90,000 more TEU in the first six months of the year than it did in the same period in 2016. The average selling price of 20-foot dry containers rose 25 per cent year on year to $1,902.
Giving Singamas a helpful boost was a Chinese environment regulation requiring all containers to use waterborne paint from April 2017. This led to a surge in orders from carriers enjoying a market upturn as the shipping lines sought to avoid any container shortages ahead of the temporary closure of production lines for conversion work to the new paint, reported IHS Media.
Also driving a return to orders was renewed confidence from container leasing companies that had again started to place orders as the business continued to improve. That saw Singamas' manufacturing operation producing 310,070 TEU compared with the 223,982 TEU made during the same period of 2016.
Singamas said dry containers accounted for 82.1 per cent of manufacturing revenue compared with 60 per cent in the first half of 2016. Revenue from specialised boxes accounted for 17.9 per cent in the first half of 2017 while last year it was 40 per cent.
"We are glad to achieve a strong return to profitable growth in the fist half of 2017, supported by the increasing demand and ASP of dry freight containers," said chairman SS Teo.
The company's outlook for the second half of the year is optimistic. In its analysis, Singamas said the positive momentum experienced during the first six months is expected to continue in the second half of the year as the global economy continues to recover, improving trade pushes up container volume (particularly in and out of China), and market sentiment strengthens.