Losses have already been accelerating this year, with Singamas turning in a net loss of $36.62m in the first half.
"The expected widening in net loss for the financial year ending 31 December 2016 is primarily attributable to the decline in the group’s turnover and gross profit margin due to the continuing downturn of the macro economy since second half of 2015," the company said in a stock market announcement.
"Slowdown of global economic conditions generally affected world trade and exports from China, which in turn affected the market demand in, and the average selling price of, new dry freight containers," Singamas added.
It noted that many new containers vessel deliveries have been postponed since 2015, which has had a knock-on effect on demand for new containers as well. The low average selling price has also significantly affected the group’s overall profitability for 2016.
"Nevertheless, the company has seen market recovery recently. The group received more orders from customers and the corresponding average selling price also increased recently," Singamas said.
It pointed out that this is due to, among other things, the increase in raw material costs, especially corten steel, and shortages in new containers inventory in China. "Besides, as the shipping companies and the leasing operators have not placed major orders for a long time, there is pent up demand for new containers. The recent improvement of their business allows them to invest in new containers," Singamas noted.
It warned however, that in light of the persisting global economic fluctuations and uncertainties, there is no assurance that the market recovery will be sustained.
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