Hubline Exits Container Shipping Business
Malaysian Shipping company Hubline Bhd will discontinue its container shipping operations to focus more on breakbulk cargo and exit the industry by the end of the financial year ending Sept 30, 2015
The company cited overcapacity in the market and difficult economic operating conditions as the main drivers behind the decision. While, shipping remains the main activity of the group, the focus would shift towards break bulk shipping, as it a viable and sustainable division with good prospects of further growth.
“The global liner industry is struggling with the depressed freight rates to meet operating costs,” the firm said in a filing to the Kuala Lumpar Stock exchange. “The container liner industry has long been suffering since the economic crisis and overcapacity in the market is still evident.
The exit process would involve withdrawal from various trade routes, termination of related service and operational contracts, as well as the disposal of container shipping related assets.
The estimated one-off costs to the income statement is expected to be about RM350 million for the financial year ending Sept 30, 2015, Hubline said.
“Over the long term, as the group concentrates on its profitable break bulk division, the board anticipates a positive impact to Hublines’ earnings,” the group said.
