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Courage Marine losses widen to $1.3m in Q3

Courage Marine losses widen to $1.3m in Q3
Dry bulk group Courage Marine saw its losses widen in the third quarter to $1.29m from $1.21m previously as the group incurred additional administrative expenses during the quarter as it tried to shuffle its business into the logistic service and merchandise trading segments.

Revenue fell by almost half from $2.42m previously to $1.29m in the period under review.

Reflecting the continued low demand in the dry bulk market, revenue from vessel chartering decreased to $1.12m, the company said in a stock market announcement.

Earlier this year on 31 March 2016 t
he group acquired some units in the logistics, custom clearance and auxiliary services business as well as import and export of goods.

However, the move seems to be unsuccessful, as these subsidiaries were subsequently disposed of on 10 November 2016 as their business and financial performance could not meet the group’s expectations, Courage said. In the third quarter this segment generated trading income of just $136,000.

The lack of activity also reduced the group's cost of sales by 36% from $2.75m in the previous corresponding period to $1.76m in the current quarter.

The vessel chartering business continues to bleed, recorded an operating loss of $461,000, an increase from $328,000 in the previous corresponding period.

The apparently ill-fated foray into the logistics services and merchandise trading business caused an operating loss of $43,000 in just one quarter.

Untangling the mess, caused administrative expenses to jump by 48% to $797,000
from $537,000 previously as the group had incurred additional costs during the quarter.

Looking ahead, Courage said: "The dry bulk market remains difficult during 9M 2016. The BDI, which has a close correlation to freight rates, was hovering at the 300 to 700 level during 9M 2016."

It also repeated the tired refrain that low demand for commodities in the Greater China Region and oversupply of vessels is putting additional pressure on freight rates in dry bulk market.

The group's fleet has a tonnage capacity of approximately 114,000 dwt currently, but due to the "challenging operating environment of the vessel chartering business," it will "continue to explore various options for reducing costs and increasing revenue of the business", suggesting that more scrappings and disposals are in store.