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Jinhui Shipping expects to record loss in 2014

Jinhui Shipping expects to record loss in 2014
Jinhui Shipping and Transportation Limited is expected to record a net loss for the year ended 31 December 2014 as against a profit in the previous financial year.

Jinhui Holdings, which owns 54.77% in Jinhui Shipping, said the loss of the shipowner for 2014 is primarily attributed to the reduced hire and freight revenue due to substantial exposure to the spot freight market, coupled with unrealised loss on investment portfolio and possible impairment loss on certain owned vessels.

Hong Kong-listed Jinhui Holdings said 2014 was a challenging year for the dry bulk shipping market, where Jinhui Shipping operates in.

“Just as the expected recovery in shipping market seemed to be on course with increasing scrapping activities providing relief to the oversupply of tonnages from orders a few years back, the market turned rapidly due to the abrupt slowdown of economic growth of China (the largest importer of dry bulk commodities),” it said.

The group added that pressures on the market also came from a new round of irrational numbers of newbuilding orders encouraged by credit availability and participation of speculative funds, and geopolitical turbulences in different regions.

“Based on the preliminary review, it is considered that impairment indication of our fleet existed at end of 2014 and the long term intrinsic values of certain owned vessels might possibly be less than the respective carrying amounts due to a change in long term fundamentals of the industry outlook,” Jinhui Holdings said.