Container, bulk and tankship owners, Samudera Shipping Line, presents its 2012 financial report with the chairman's letter to shareholders.
The following is extracted from Mr. Masli Mulia's letter to stakeholders:
"The financial year ended December 31, 2012 saw the Group delivering another year of profitable performance amidst challenging industry landscape, leveraging our competitive position and strengths to meet challenges in Indonesia and the region.
Group revenue improved by 3% to $ 467.7 million (USD), from $454.2 million in the previous year (FY11), lifted by the implementation of bunker surcharges in the regional container shipping segment and higher volume handled by the Indonesia domestic container shipping business. This offset a decline in revenue contributed by the bulk carrier, offshore and tanker business on lower charter rates and reduced fleet size.
Net profit attributable to shareholders registered a decline to $4.2 million, from $12.0 million in FY11. This takes into account an increase in other operating expenses, following the write-off of two vessels, one of which was damaged in a fire and the other grounded by strong winds, along with reduced foreign exchange gain and higher financial expenses.
Our FY12 performance reflects the many challenges we encountered that tested our mettle and nimbleness to adapt and find ways to maintain our competitiveness. Intensive competition for cargo in a vessel oversupply situation had the effect of driving both freight rates and charter rates even lower, and impacting our operations. This was exacerbated by an on-going Europe debt crisis and disputes over the US debt ceiling that eroded global shipping demand, along with high bunker prices, and fluctuating foreign exchange rates.
In response, we embarked on a series of actions to protect our profitability. We maintained a tight rein on our costs, prudently implementing bunker surcharges and hedges. We reviewed our asset configuration, which involved the disposal of underperforming vessels during the year under review, in order to maximize profit contribution from existing vessels.
We have also reviewed and adjusted our strategy in the face of direct competition from main-line operators that decided to serve the regional routes directly instead of relying on common feeders like they used to. To maximize the utilization of our existing fleet, we leveraged our parent company’s wider regional and Indonesian network and customer base to generate cargo volume, and cooperated with other carriers on slot swap arrangements to add new sectors and deploy our capacity more efficiently."