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Sinotrans Shipping reports loss of US$242m in 2016
A DEPRESSED shipping market and vessel impairment resulted in Hong Kong-listed Sinotrans Shipping to post a larger loss for 2016 compared to 2015.
Loss for last year was recorded at US$242.11 million, widening from the deficit of $81.54 million in 2015, in line with the company's expectations, the Seatrade Maritime News of Colchester, England, reported.
"Management has reviewed the latest market developments and the business plan and considers the recoverable amount of vessels to be adversely impacted by the continuous uncertainty of the global economy, the supplies of vessels, and the challenging shipping market operating environment. Based on the assessment, an impairment loss of $162.8 million is recognised," Sinotrans Shipping said.
The full year revenue declined by 15.8 per cent year on year to $841.46 million as contributions from both its dry bulk shipping and container shipping segments were reduced.
In the face of the sluggish market condition, the group continued to put more efforts on adjusting its fleet size. After scrapping 18 elderly vessels in 2015, the company scrapped another five elderly panamax bulkers and took delivery of four handymax eco-vessels in 2016.
Sinotrans Shipping has an orderbook of 15 vessels of which six handysize bulkers and four container vessels are slated to be delivered from 2017 onwards.
"In 2017, it is expected that the growth of (dry bulk) capacity will continue to slow down," the company commented.
"The growth rate of supply is expected to be lower than that of demand for the first time over years, bringing hope to market recovery," it said.
"Compared with the global container shipping market, business activities among intra-Asia are more active and the competition landscape of container routes tends to remain stable, which shows a positive sign in freight rate."
Loss for last year was recorded at US$242.11 million, widening from the deficit of $81.54 million in 2015, in line with the company's expectations, the Seatrade Maritime News of Colchester, England, reported.
"Management has reviewed the latest market developments and the business plan and considers the recoverable amount of vessels to be adversely impacted by the continuous uncertainty of the global economy, the supplies of vessels, and the challenging shipping market operating environment. Based on the assessment, an impairment loss of $162.8 million is recognised," Sinotrans Shipping said.
The full year revenue declined by 15.8 per cent year on year to $841.46 million as contributions from both its dry bulk shipping and container shipping segments were reduced.
In the face of the sluggish market condition, the group continued to put more efforts on adjusting its fleet size. After scrapping 18 elderly vessels in 2015, the company scrapped another five elderly panamax bulkers and took delivery of four handymax eco-vessels in 2016.
Sinotrans Shipping has an orderbook of 15 vessels of which six handysize bulkers and four container vessels are slated to be delivered from 2017 onwards.
"In 2017, it is expected that the growth of (dry bulk) capacity will continue to slow down," the company commented.
"The growth rate of supply is expected to be lower than that of demand for the first time over years, bringing hope to market recovery," it said.
"Compared with the global container shipping market, business activities among intra-Asia are more active and the competition landscape of container routes tends to remain stable, which shows a positive sign in freight rate."
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