Revenue growth was driven by new container demand, Singamas said in a stock market announcement, with revenue from the segment rising to $1.52bn from $1.25bn in the previous corresponding period. "This upturn was encouraged by improving economic conditions in the United States, greater number of large container vessel deliveries and the need for replacement containers," said Singamas.
The increase in demand was however tempered by a decline in the ASP of standard twenty-foot dry freight containers, which slipped to $2,086 compared with $2,195 in 2013. The drop reflected the decline in raw material prices, particularly corten steel price. For the segment, profit before taxation and non-controlling interests slipped slightly to $45.5m compared to $46.7m the previous year, although this included a one-off gain of $9.8m from the disposal of two factories in Shunde.
Total production volume increased to 686,474 teu by the close of the reporting year, compared to 525,449 teu in 2013. Total sales volume reached 683,007 teu versus 542,442 teu in 2013. By proportion, revenue contributions from dry freight containers and specialised containers came up to 70.6% and 29.4% respectively, compared with 73.7% and 26.3% respectively in 2013. Meanwhile, the production of US domestic D53 containers surged during the review year, driven by the economic recovery in the United States, with orders doubling from that of 2013.
The much smaller logistics segment continued to provide a stable stream of revenue to the group, amounting to $31.1m, up from S$29.1m previously. The total number of containers handled amounted to approximately 3.17m teu up from 3.02 teu previously.
As part of the management’s efforts to bolster the logistics business, it increased the group’s shareholding in a depot in Xiamen from 28% to 35% in early 2015. The increased stake was motivated by the depot’s encouraging performance and ability to provide steady income to the Group. Moreover, the group will be able to derive benefit from Xiamen’s geographical location, as well as preferential policies implemented by the Xiamen Government aimed at encouraging container manufacturing and development of the local port facilities.
Looking ahead, Singamas sees several positive developments that suggest the new financial year will present greater opportunities for the container industry, including a significant number of ultra large container vessel deliveries scheduled from 2015 through to 2017, a gradual rebound in the price of corten steel which is expected to drive the price of containers upwards in tandem, as well as the fact that the replacement cycle of old containers is expected to gather pace as the performance of shipping companies stabilises.