Loss for last year was recorded at $242.11m, widening from the deficit of $81.54m, in line with the company’s expectations.
“Management has reviewed the latest market developments and the business plan and considers the recoverable amount of vessels to be adversely impacted by the continuous uncertainty of the global economy, the supplies of vessels, and the challenging shipping market operating environment. Based on the assessment, an impairment loss of $162,793,000 is recognised,” Sinotrans Shipping said.
The full year revenue declined by 15.8% year-on-year to $841.46m as contributions from both its dry bulk shipping and container shipping segments were reduced.
In the face of the sluggish market condition, the group continued to put more efforts on adjusting its fleet size. After scrapping 18 elderly vessels in 2015, the company scrapped another five elderly panamax bulkers and took delivery of four handymax eco-vessels in 2016.
Sinotrans Shipping has an orderbook of 15 vessels of which six handysize bulkers and four container vessels are slated to be delivered from 2017 onwards.
“In 2017, it is expected that the growth of (dry bulk) capacity will continue to slow down,” the company commented.
“The growth rate of supply is expected to be lower than that of demand for the first time over years, bringing hope to market recovery,” it said.
“Compared with the global container shipping market, business activities among intra-Asia are more active and the competition landscape of container routes tends to remain stable, which shows a positive sign in freight rate.”