Shipping capacity to increase on more newbuilding deliveries: Samudera
Global shipping capacity is expected to increase amid the already oversupplied market as newbuilding deliveries continue to outpace vessel scraping activities, according to Indonesia’s Samudera Shipping.
The regional container line is anticipating operating challenges to prevail in the container, bulk and tanker sectors in the ensuing months.
“Weaker economic data from major markets around the world raises uncertainties for trade demand for the shipping industry,” Samudera Shipping commented, adding that the unresolved oversupply of ships is adding on to the challenges.
“In this regard, competition for container cargo is expected to remain intense, and consequently exert pressure on freight rates. However lower bunker prices and charter-hire rates help to partially mitigate the impact of lower freight rates,” the company said.
Samudera Shipping has disposed of a 3,097-dwt, 1990-built chemical tanker to affiliate PT Smudera Energi Tangguh at a price of $360,000 this month.
“In light of the overall decline in the wider market for cargo, the group will take a critical review of the carrying value and economic benefits of its vessels. If the weak market condition persists, further provisions may be required which will have a negative impact on the group’s performance,” it said.
Singapore-listed Samudera Shipping has already been impacted by the overall weak market as it posted a sharp 76.5% year-on-year drop in third quarter profit to $1.23m.
The fall was mainly attributed to other operating expenses rising significantly to $2.59m during the quarter from $15,000 in the year-ago period as the group recorded a $2.6m impairment on two container vessels and a chemical tanker that it intends to dispose.
The quarterly revenue also fell 14.8% year-on-year to $75.16m, in line with lower contributions from across the different shipping segments.
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