Shin Yang Shipping FY17 profit slumps on weak market

Shin Yang Shipping Corp (SYS Corp) was hit by the continued weak shipping market seeing FY2017 net profit fall by a third to MYR5.3m ($1.25m) as revenue fell 8% to MYR 589.7m on lower revenue from the international shipping segment, with a 20% drop compared to the previous corresponding period.

In a stock market announcement SYS Corp said that In the dry bulk sector, it focussed its efforts on the domestic and coatal shipping segments. Consistent volumes with the Far East trades saw its eight vessels shipping 423,000 cu m of cargo at an average freight rate of $35-$39 per cu m. Backhaul legs were mainly on time charter for shipments of general cargo from far east regions to the Philippines, then enroute back to Sarawak.

In the liquid bulk sector, stable seasonal demand for CPO shipments in East Asia led to an improved freight rate of $26 to $31 per metric ton. An eight-month contract of affreightment from Petronas Chemical Marketing (Labuan) to ship methanol products from Labuan also helped.

In the container sector, SYS Corp is seen benefitting from its East Malaysia Network strategic alliance with Northport and expects to have more stability in its containers shipping through its cooperation agreement providing coverage between East Malaysia and West Malaysia with its thirteen container vessels. The group lifted 98,075 teu in this financial year.

Nonetheles for the domestic and regional shipping segment, revenue fell to MYR312.7m from MYR328.9m previously while segment profit also slid 30% to MYR42.5m from MYR60.4m previously.

In International Shipping, foreseeing unstable Middle East shipping demand, the Group had sold its stakes in loss making units Aya Shin Yang FZC and Shin Yang Shipbuilding and Engineering RMC FZC.

The international shipping segment however also saw revenue plunge by a fifth to MYR185.5m from MYR235.1m previously although segment losses narrowed to MYR37.1m.

The shipbuilding segment saw weaker demand from the oil and gas sector due to capital expenditures cuts.

Ship repair and fabrication did slightly better, with this sector repairing a total of 825 units in the year. Nevertheless SYSCorp delivered four vessels during the year but segment losses almost doubled to MYR20.7m from MYR11.8m previously and revenue fell to MYR134.4m.

Looking ahead, SYS Corp said: "We foreseen that the price of crude oil price remains stable which in turn contributed to our anticipated stable bunker fuel costs to our shipping operation."

Meanwhile continuous infrastructure development in Sarawak and the neigbouring Brunei is expected to create a lot of demand for shipping services.

"The challenge for the group is to further improve its efficiency and productivity in both fleet efficiency and shipbuilding consolidation activities," SYS Corp concluded.

Posted 01 November 2017

© Copyright 2019 Seatrade (UBM (UK) Ltd). Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Seatrade.

Vincent Wee

Asia Editor, Seatrade Maritime News

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