Singamas issues profit warning, blaming weak economy

The container manufacturer said in a stock market announcement that it expected to report a "significant decline in profit which may or may not result in loss for the financial year ending 31 December 2015", against the net profit of $28.02m in 2014. The decline in turnover and gross profit margin was "due to the recent downturn of the macro economy, Singamas said.

It added: "The slowdown of global economy affects export trade from the People’s Republic of China (PRC), which has in turn affected the demand in, and the average selling price of, new dry freight containers, especially in the second half of 2015. This market downturn is expected to continue in the first half of 2016."
 
Singamas noted however that its specialised container manufacturing and logistics businesses are still on track and the group has also implemented a series of cost control measures and is continuing its focus in expanding its product mix by developing more higher-margin specialized containers to help ameliorate the effects. "The group expects its financial results to turn around when the PRC and global economies stabilize, which may be in the foreseeable future," Singamas said.
   
Despite the profit warning, the group’s financial situation as a whole is sound with its gearing ratio at a reasonable level and it is "well poised to capture opportunity when the market picks up," the company concluded.