SINGAPORE (Feb 27): Samudera Shipping swung back into the black in FY17 with earnings of US$5.9 million ($7.8 million), a reversal from the loss of US$5.4 million in FY16.
For the FY17 ended Dec, Samudera recorded an 8.9% increase in revenue to US$283.7 million from a year ago. This came on the back of higher revenue contribution from its container shipping business segment.
As a result of the 10% increase in container volume handled to 1.3 million TEUs coupled with freight rates improvements, revenue from the container shipping business rose 11.2% to US$250.7 million in FY17 from a year ago.
Revenue from the bulk & tanker business fell 11.1% to US$26.9 million in FY17 as the group operated a smaller tanker fleet.
Cost of services increased 8.2% to US$266.0 million, taking into account higher bunker price and container volume handled during the year.
This resulted in gross profit of US$17.7 million in FY17, a 21% improvement over the US$14.6 million recorded in FY16.
Marketing and administrative expenses decreased 8.5% to US$13.4 million. Other operating expenses fell to US$0.1 million while operating expenses was also higher in FY16 due to impairment loss recorded on two dry-bulk carriers and three Indonesia-flagged container vessels.
Other operating income declined 40.9% to US$2.3 million while operating income was higher in FY16 mainly due to insurance claim payment received for a vessel that was grounded and subsequently written off in 2012 for sustained damage.
The group registered a profit of US$6.5 million from operations in FY17, against a loss of US$3.9 million a year ago.
While recent indicators point to improving conditions in the container shipping industry, Samudera expects competition to heat up in 2018, led by a consolidation among mainline operators and the resulting concentration of market share.
In addition, with new tonnage in excess of demand entering service in the coming year, intense competition for cargo will persist. Compounding this is the anticipated uptrend in bunker prices in the year ahead.
Shares in Samudera Shipping closed 2 cents higher at 22 cents on Tuesday.
