Sinotrans Shipping Rings Profit Slide Alarm
Hong Kong-listed Sinotrans Shipping Limited has warned its shareholders and potential investors that the company expects to record a substantial decrease or even a considerable loss in net profit for the first six months of 2015, compared to the same period in 2014.
Sinotrans issued the warning following the preliminary review of the unaudited consolidated management accounts of the company.
The company attributes the potential plunge in net profit to the continual slowdown of growth in international trade and dry bulk seaborne volume, due to the slowdown of economy growth in China and other emerging markets in 2015.
The expected slide is also chalked up to the fact that the supply of global dry bulk capacities has been in excess of the demand for dry bulk cargoes in recent years, leading to a sharp decrease in the charter hire rate and freight.
As at June 30, the Baltic Dry Index (BDI) recorded an average of 623 points (2014: 1,179 points), representing a year-on-year decrease of 47%.
The company also expects to record losses through the disposal of aged vessels.