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Singamas slumps to $37m H1 loss on slowing economy

Singamas slumps to $37m H1 loss on slowing economy
Singamas Container Holdings turned to a $36.6m loss in the first half from a $10.1m profit previously as revenue plunged 42% to $410.3m from $704.0m in the previous corresponding period.

Singamas blamed a continuing slowdown in the global economy as the downward trend that was especially acute from the second half of 2015 persisted.

"The lacklustre conditions directly affected world trade, which in turn impacted on the demand for new dry freight containers and placed further pressure on the average selling price (ASP)," Singamas said in a stock market announcement.

The company noted that the recent major movements in the container liner and leasing space have created market uncertainties, which further aggravated demand for newcontainers due to delays in capital investments.

"The combination of lower business volume and lower ASP resulted in an appreciable decline in the group’s performance," SIngamas concluded.

At a segment level, revenue from the main manufacturing operations slipped to $393.8m from $688.2m previously and slipped to a pre-tax loss of $33.5m from a $12.4m profit previously.

Both volumes and selling price fell. The group produced 223,982 teu in the first half compared to 336,581 teu previously while the ASP of a 20-foot dry freight container fell from $1,880 to $1,414 year-on-year number of containers sold came up to 236,388 teu down from 331,449 teu previously.

Singamas' logistics operation performed relatively better, putting in at least a stable performance, generating revenue of $16.5m, slightly up from $15.9m previously.

However, profits were hit, as due to commercial reasons, the Group made additional compensation of $6.7m in connection with the Tianjin explosions incident.

As a result the segment turned to a pre-tax loss of $3.8m from a profit $3.8m previously. A total of approximately 1.7m teu was handled by the group compared to 1.6m teu in the previous corresponding period.

Looking ahead, Singamas said: "The challenging economic conditions are not expected to subside in the short term; hence demand for new containers will remain weak in the immediate future."