Hong Kong-listed box manufacturer Singamas Container Holdings hopped back into the black on the back of a surge in container demand during the first half of 2017.
Singamas accredited a recovering global economy, the rise in international trade and the corresponding pick-up in shipping volumes for its positive change in fortunes as container demand improved and the average selling price headed north. Net profit for that January-June period of 2017 was $16.6m, compared to a $36.62m loss during the first half of 2016.
The Group’s consolidated revenue soared by 45% to $595m compared to US$410.28m in the first half of 2016.
Chairman of Singamas, Teo Siong Seng said: “We are glad to achieve a strong return to profitable growth in the first half of 2017, supported by the increasing demand and ASP of dry freight containers. Besides, we have also made progress in the logistics services segment by continuing to promote the joint venture in Guangxi and push forward our liquid tank logistics operation in India.”
The ASP of a 20-foot dry freight container rose from US$1,414 to US$1,902 as a result of higher demand and the rise in price of corten steel. During the review period, a total of 303,668 teu were sold, compared to first half 2016 at 236,388 teu, resulting in a segment profit before taxation and non-controlling interest of US$19,871,000 versus a segment loss before taxation and non-controlling interest of US$33,520,000 for the same period last year.
Singamas expects the positive momentum gained in first first half to persist for the rest of the year. Much of the optimism is based on the conviction that liner shipping companies are now more willing to allocate capital for the replacement of old containers as well as purchase new containers to meet anticipated demand.
The Group’s logistics business generated revenue of US$18.476m during the review period (1H2016: US$16,520,000). With the claims from the Tianjin explosion incident now resolved and the depot in Tianjin having resumed normal operation at the beginning of this year, the Group reported a segment profit before taxation and non-controlling interest of US$2.261m (1H2016: a segment loss before taxation and non-controlling interest of US$3.828m). During the review period, a total of approximately 2,078,000 teu were handled by the Group (1H2016: 1,710,000 TEUs), while the average daily container storage totaled 113,000 teu (1H2016: 156,000 teu).
Mr. Teo concluded, “With the improving market environment, Singamas will strive to enhance all areas of operations and take every opportunity to strengthen our market position and will remain vigilant and prepare well for any potential external risks. Given its sound financial health, we are confident the Group is in a position of strength to move forward.”