Sinotrans Plummets Further into Red
Hong Kong-listed Sinotrans Shipping Limited has plunged further into the red as its annual net loss dropped to USD 81.5 million in 2015 from a net loss of USD 12.7 million seen a year earlier.
Full year revenue from the company’s dry bulk, container shipping and other operations were at USD 999.7 million at the end of the year, a decrease from USD 1.2 billion recorded in 2014.
Revenue from the dry bulk segment fell to USD 501.6 million in 2015 from USD 619.1 million in the previous year, while revenue from the company’s container shipping business slid to USD 495.8 million from USD 585.2 million.
Due to an extremely sluggish dry bulk shipping market in 2015, the average daily time charter equivalent (TCE) rate of dry bulk vessels decreased to USD 8,129, compared to USD 10,074 in 2014.
The container shipping business in 2015 was also “grim”, resulting in the steep drop of freight rates. The average China Containerized Freight Index (CCFI) for the year recorded the lowest level of 879 points, decreased by 19% over the same period of last year. The company shipped 856,999 TEUs during the year, while in 2014 it handled 898,935 TEUs.
In 2015, Sinotrans Shipping expanded to new business such as LNG shipping, and restructured and and upgraded its fleet.
“Benefitting from the national policy of aged vessels replacement, we seized the favorable opportunity to accelerate the fleet upgrading. We centrally dismantled and scrapped 18 aged vessels and received 6 new eco-vessels. At the same time, in order to meet the need of business development, the group placed orders for the building of 10 new vessels, including 6 handysize bulk and 4 container vessels,” Sinotrans said.
The company added that the dry bulk market may remain sluggish in 2016, however it is expected that the room for further decline in the market will be minimal.
For the Intra-Asia container shipping market, Sinotrans said that, with the development of China’s One Belt and One Road strategy and implementation of various free trade agreements, trading activities among countries in the region would be more active.
“Based on the principle of profit orientation, the group will keep developing new business such as LNG shipping business to secure long-term stable returns, and seeking for other opportunities while consolidating current business development. The group believes that through above measures, its business scale will be expanded and its risk control ability will be enhanced. The group will seize opportunities for further development against the unfavorable market environment,” Sinotrans said in a statement.