Courage Marine narrows 2016 loss to $18m

Courage blamed the decrease in the group’s revenue mainly on the drop in revenue in the key marine transportation business as demand for vessel chartering and freight rate remained low throughout most of 2016.

Operating losses were also reduced because less vessels were being operated during the year due to the weak operating environment.

The marine transportation business generated revenue of $3.6m 46% down from $6.6m in the previous corresponding period as low demand for commodities in the Greater China Region in recent years has adversely impacted the demand for vessel chartering in the dry bulk market throughout most part of 2016, Courage said.

"In addition, the oversupply of vessels has put extra pressure on freight rate in dry bulk market... The sluggish demand for vessel chartering and hence low utilisation rate of the group’s vessels, together with low freight rate were the main causes that led to the decline of the operation’s revenue," the group said.

The marine transportation business recorded an operating loss of $3.3m although this was an improvement on the $5.2m loss recorded in 2015, due to lower operating costs as fewer vessels were chartered out and the disposal of two loss-making vessels.

However, impairment charges of $10.8m had to be taken on the fair value of two vessels Zorina and Heroic, held by the group, although this was an improvement over the $20.7m charge the year before.

Looking ahead, Courage said: "The board is of the view that the operating environment of the group’s marine transportation business will continue to be difficult in the near term.

"It has therefore decided to shift its focus to plan to progressively put more emphasis on the property holding and investment, investment holding and merchandise trading segments, which are expected to make positive contributions to the group in terms of revenue and profitability and boost overall results in future.”