The dry bulk shipping firm is expecting the low freight rates for the remainder of this year due to oversupply of tonnage and excess shipbuilding capacity, despite an overall increase in demand volumes.
“Although recent activities that positively reduced the supply side such as slippage and scrapping have been higher than previous years, we expect that the operating environment of our industry will remain tough in 2013,” Jinhui said.
“Looking ahead, we expect further company defaults and rising counterparty risks, but at the same time we believe there will be interesting opportunities for those who are patient, prepared and have placed liquidity as a priority in the past years,” it added.
The challenging business environment has seen Jinhui suffered a setback as it posted lower earnings in the first quarter ended 31 March 2013.
The Hong Kong-listed firm recorded first quarter net profit of $2.83m, a plunge of 68% compared to $8.84m of profit in the same period of 2012.
Revenue also fell 7.9% year-on-year to $53.88m. Jinhui said the first quarter results were negatively impacted by lower hire revenue earning in the prevailing low freight rate environment.
As at 31 March 2013, Jinhui had 38 owned vessels which included two post-panamaxes, two panamaxes, 32 grabs fitted supramaxes, one handymax, and one handysize.
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