Loss-making Samudera warns of headwinds for container shipping

Samudera Shipping Line has forecast a difficult year ahead for the global container shipping sector, as the shipowner has started the year on a poor note with a net loss in the first quarter.

“The container shipping industry is expected to continue to face headwinds in the year ahead, ranging from rising bunker costs, to cost pressures associated with IMO’s low sulphur fuel regulations,” Samudera stated in its first quarter results announcement.

“Slower regional economic growth is also expected to pose challenges to the operating environment. This causes higher volatility of freight rates and complicates operating conditions,” the regional shipping line said.

The company added that the same concerns have also weighed on the outlook of the bulk and tanker sectors.

In the first three months of 2019, Singapore-listed Samudera slumped to a loss of $191,000 as against the profit of $324,000 in the same period of last year.

First quarter revenue was recorded at $93.04m, inching up 1.5% from $91.62m in the year-ago period.

Samudera noted that cost of services rose by 1.9% year-on-year to $90.8m in the first quarter, mainly driven by higher costs in the container shipping segment. The increase took into account the higher charter-hire costs and freight charges associated with a higher number of slot exchange arrangements undertaken in the first three months.

“The group will continue to focus on the optimisation of its cost and operational efficiency to reinforce its competitive position. It will also continue to manage its fleet prudently and efficiently,” Samudera said.

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Meanwhile, the company’s 51% owned warehouse joint venture in Malaysia’s Port Klang has begun to make positive contributions in the first quarter. The warehouse venture will serve as a base for the group to expand its logistics businesses in Malaysia and other parts of Southeast Asia.

“The group is currently evaluating opportunities to provide logistics services in Malaysia and Vietnam respectively,” Samudera said.

Posted 30 April 2019

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Lee Hong Liang

Asia Correspondent

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