Singapore-listed container shipping company Samudera Shipping Line posted a profit of USD6.1 million for the first quarter ended 31 March 2015, much higher than its USD0.4 million profit in the first quarter of 2014.
The first quarter’s higher profit was recorded despite a year-on-year (y/y) drop in its revenue by 6.8% to USD80.4 million from USD86.2 million. The decrease in revenue was due to the lower earnings from both its container shipping, as well as the bulk and tanker business.
Samudera stated in its filing to the Singapore Exchange (SGX) that the revenue for the container shipping business segment fell 3.1% y/y to USD69.2 million in the first quarter of 2015 from USD71.5 million. This was driven by a 6.6% decline in container volume handled to 280,000 teu in the first quarter of 2015 and reflected the company’s effort to exit non-profitable services, especially the Indonesia domestic routes.
Similarly, revenue from the bulk and tanker business also suffered a y/y drop of 26.5% to USD10.5 million in the first quarter on 2015 from USD14.3 million. The decline was mainly due to the company operated fewer vessels in the first-quarter 2015, following the disposal of non-performing vessels in 2014, the non-renewal of the charter-in contract of a chemical tanker upon its expiry at end-2014, as well as the scheduled docking and repair of some vessels during the period.
However, Samudera’s cost of services fell by 12.4% y/y to USD71.7 million in the first-quarter 2015 from USD81.9 million, largely because of lower container volume handled, fewer vessels operated in the bulk and tanker business, the sharp decline in bunker price, and the renewal of part of the company’s chartered fleet at lower charter rates.
Therefore, on the back of significantly lower costs, Samudera recorded a 102.4% y/y increase in gross profit to USD8.7 million in the first quarter of 2015 from USD4.3 million.
Going forward, Samudera expects a challenging business environment ahead due to the depressed freight rates and the strong competition among vessels operators. Thus, the company will continue to actively manage its fleet composition and deployment strategy in order to maximise the utilisation and return on all of its vessels.