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Singamas hit by weak container market, turns to $2.7m loss in 2015

Singamas hit by weak container market, turns to $2.7m loss in 2015
Container manufacturer Singamas Container Holdings was hit by the slowdown in the global economy and turned to a net loss of $2.7m in 2015 from a $28m profit previously as revenue also slipped to $1.13bn from $1.55bn in 2014.

Singamas blamed the poor results on the downturn of many major economies, which caused the entire container industry to see a decline in performance in 2015, particularly during the second half when the demand for, and average selling price of new freight containers softened.

The group has adapted to the change in conditions which has helped ameliorate the effects of the downturn. It has reallocated resources and its specialised containers manufacturing and logistics businesses both achieved good progress in 2015.

Container manufacturing, which still contributed the bulk of revenue, saw turnover fall by a third to $1.1bn from $1.5bn previously while segmental profit plunged to $2m from $45.5m in 2014.

This was caused by a double whammy of a 23% drop in total production volume to 526,893 teu from 686,474 teu previously, while average selling price fell 14% to $1,789 and total sales volume fell by 24% to 520,684.

There have been improvements in the product mix however as the proportion of higher margin specialized containers rose to 41% of manufacturing revenue from 29% previously. Management made adjustments to production facilities to better tap this market and is in the process of building a new reefer container factory in Qingdao which is on track to commence trial production in early 2017. 

Looking ahead, the demand for new container is likely to remain soft in the first half of 2016, and the outlook for the upcoming year remains uncertain, Singamas concluded.