HONG KONG container maker and logistics services provider Singamas Container Holdings posted a first half profit decline of 24 per cent to US$10.07 million drawn on revenues of US$704.02 million, an increase of 3.7 per cent year on year.
"In the first half, demand for containers rose modestly as the further decline in material costs, especially corten steel, placed pressure on the selling price of containers," said Singamas chairman Teo Siong Seng.
"Despite the flaccid outlook, the container industry will benefit from the significant number of ultra large containerships scheduled from 2015 through to 2017," he said.
"Moreover, the replacement cycle of old containers must be addressed by shipping companies, thus warranting the order of new containers in the near future," he said.
"The low selling price consequently attracted orders from customers despite the slow trading environment in China. The group has thus recorded slight improvement on the revenue during the review period," he said.
The manufacturing segment remains the principal business of the group, accounting for 97.7 per cent of revenue. With container demand remaining stable, the manufacturing operation generated revenue of US$688,161,000 in the first half.
In this time, the Singamas produced 336,581 TEU, which was higher than the corresponding period of last year when 302,852 TEU was produced.
But the average selling price per TEU fell from $2,147 to $1,880 year on year. A total of 331,449 TEU were sold with segment profit before taxation and non-controlling interests amounting to US$12,373,000, or decline of 42.4 per cent when compared to last year.
"In respect of specialised containers, a positive development that will benefit the group and other container manufacturers in China has been the ruling in May 2015 by the US International Trade Commission (USITC) to open the way for the unobstructed delivery of 53-foot domestic dry containers, an area of business that has enjoyed a steady rise in demand," said the company statement.
The demand for such containers is expected to further rise as the economic recovery in the United States gathers momentum.
Singamas also holds keen interest in refrigerated containers, as substantiated by the operation of a refrigerated container factory in Qidong that achieved operational breakeven point in the second half of 2014, and produced 6,700 units during the review period.
With significant effort placed on increasing the production and sale of specialised containers over the last few years, dry freight containers and specialised containers accounted for 67 per cent and 33 per cent of revenue respectively, compared with 72.4 per cent and 27.6 per cent for the same period last year.
The logistics services business remained stable within the review period as reflected by revenue of $15.86 million generated, decreased by 2.5 per cent from $16.27 million for the corresponding period last year. Segment profit before taxation and non-controlling interests rose slightly to $3.8 million (1H2014: US$3.72 million).
The group handled 1,568,000 TEU compared with 1,643,000 TEU for the same time last year. Average daily container storage reached 114,000 TEU.
The outlook for the second half year of 2015 is expected to be lacklustre for the container industry as China's export growth will continue to be slow and the volume of world merchandise trade will rise only modestly over the next two years.
Singamas' manufacturing business covers 12 mainland container factories. Its logistics operations include 11 container depots/ terminals, eight located in key locations in the PRC - Dalian, Tianjin, Qingdao, Shanghai, Qidong, Ningbo, Fuzhou and Xiamen, two in Hong Kong and one in Laemchabang, Thailand.
It also runs a logistics company in Xiamen Riding on its comprehensive investment strategies
WORLD SHIPPING
20 August 2015 - 12:03
Singamas profit falls 24pc to US$10.07, but sales rise 3.7pc
HONG KONG container maker and logistics services provider Singamas Container Holdings posted a first half profit decline of 24 per cent to US$10.07 million drawn on revenues of US$704.02 million, an increase of 3.7 per cent year on year.
WORLD SHIPPING
20 August 2015 - 12:03
Singamas profit falls 24pc to US$10.07, but sales rise 3.7pc
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