HONG KONG listed dry bulk giant Sinotrans Shipping posted a widened first half loss 22.2 per cent year on year to US$40.2 million, drawn on revenues of 385.8 million, which fell 20 per cent.
Revenues from dry bulk shipping operations plunged 31.5 per cent to $161.9 million while the container shipping revenues fell 5.5 per cent to $223.2 million.
"The balance between supply and demand kept tilting under the context of sluggish world trade growth caused by depressed overall demand on one side and increasing fleet capacities on the other side," the company said.
"The international shipping market has further depressed compared to 2015, evidenced by the unprecedented historical low market index of dry bulk shipping and container shipping market."
Sinotrans has an orderbook of 11 vessels, of which one handymax vessel is expected to be delivered in the second half of the year, six handysize bulk vessels and four container vessels are expected to be delivered from 2017.
The recovery in world economies could be seen in the Baltic Dry Index, which provides an assessment of the movement of major raw materials by sea, said the company statement accompanying the results.
The index reached an average of 1,179 points, representing a year-on-year increase of 40 per cent, reported Hong Kong's South China Morning Post.
Nevertheless, the index lingered below 1,000 for most of the second quarter, and the pace of recovery for charter hires and freight rates was far below market expectations, the company said.
A glut of ships means recovery in the industry will be slow. Although moderate growth was seen in world trade, "dry bulk seaborne demand lost momentum on account of the decelerating economic growth of China and other emerging economies".
Sinotrans managing director Li Hua said at a briefing the fleet growth rate was likely to reach a 10-year low this year and it would take time to clear excess ships.
"The cumulative effects caused by the previous oversupply of tonnage have led to difficulties," Mr Li said, adding it would take one or two years to clear the inventory in the industry.
Sinotrans is one of the biggest shipping companies on the mainland based on the size of its dry bulk fleet. Most of its business is in the transport of cargo such as iron ore, coal, grain, steel products and other commodities.
WORLD SHIPPING
21 August 2016 - 21:29
Sinotrans H1 loss widens to US$40.2 million as revenues shrink 20pc
HONG KONG listed dry bulk giant Sinotrans Shipping posted a widened first half loss 22.2 per cent year on year to US$40.2 million, drawn on revenues of 385.8 million, which fell 20 per cent.
WORLD SHIPPING
21 August 2016 - 21:29
Sinotrans H1 loss widens to US$40.2 million as revenues shrink 20pc
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