Seoul: South Korean shipping company STX Pan Ocean has ordered three new $28m handymax vessels from China-based Taizhou Maple Leaf following its announcement of a 131.7% increase in its net profits to $60m for the first three months of 2007 upon revenues of $1,008m. It has attributed the increase to market factors, particularly in the dry bulk sector, such as higher freight rates, lower bunker fuel costs and stronger freight volumes, which led to a 195.8% spike in gross profits to $111m for the period.
During that time, the group combated rising costs for ship hire, port and cargo fees and crew expenditure. It also reported a $30m other operational loss, mainly due to forward freight agreement (FFA) losses worth $27m - consisting of $4m in transaction loss and $23m in unrealised valuation loss. Although this contrasts with FFA gains of $1.8m for the same period last year, the company stresses that it expects to realise the valuation losses when the FFAs mature and the corresponding profits will be realised from actual physical transactions in the future.
The newbuilds are to be delivered in 2009 with an option of an additional handymax to be delivered in 2010. [15/05/07]
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