Singamas said in a press release that the container industry continued to be affected by the downturn of the global economy, with market demand and the average selling price (ASP) of new dry freight containers remaining under pressure.
"The group was inevitably impacted by such economic doldrums," it said, noting also that additional compensation in connection with the Tianjin explosion incident and other one-off expenses contributed to the poor results.
Due to a weak global economy and decline in exports, as well as market uncertainties created by the major mergers and acquisitions by a number of shipping companies and container leasing operators.
Demand for new containers remained lacklustre for much of the year due to weak global trade conditions and market uncertainties from the consolidation activity in the industry, Singamas said.
The ASP of a standard 20-foot dry freight container fell from $1,789 in 2015 to $1,457 in 2016, due to a significant decline in the price of corten steel and generally weak market demand.
As a result, revenue from Singamas' key container manufacturing operations fell to $880.7m from $1.09bn previously and the segment turned to an operational loss of $59.6m from a profit of $2.1m previously.
However, the group maintained market share, producing 523,785 just slightly lower than the 526,893 teu manufactured in 2015 and total sales volume rose 4% to 543,708 teu from 520,684 teu previously.
The still small but growing logistics services segment continued to perform stably with revenue rising slightly to $35.8m from $32.6m in 2015. However segment results were hit by $6.7m in charges that had to be taken due to further compensation made in relation to the Tianjin explosion incident. Segment operational profit fell to $1.3m from $6.8m previously as the group handled 3.7m teu, up 23% from 3.1m teu in 2015.
“The industry will have to continue tackling stiff challenges in the foreseeable future, therefore, Singamas will remain cautious on the business development front and continue to implement effective cost control measures," concluded chairman Teo Siong Seng.
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