Singamas Container: Profit Down in 2014, Bullish for 2015
The world’s second-largest container manufacturer Singamas Container reported 2014 net profit which is lower than the previous year, but is expecting a better 2015 bolstered by pent-up demand from shipping lines and the firm’s investment in a gateway province between China and Southeast Asia.
The Hong Kong-listed box-maker saw net profit fall 21 per cent to US$28 million (HK$217miilion), falling short of an estimated US$36.5 million in a Bloomberg poll of three analysts.
Revenue jumped 20 per cent to US$1.5 billion, but this failed to translate into a higher bottom-line due to the lower selling price of the standard 20-foot dry freight containers, the firm’s main product used to carry industrial and consumer goods such as apparel, rubber and toys.
A significant number of ultra-large container ship deliveries are scheduled from 2015 to 2017, while the price of Corten steel is expected to gradually rebound, which will drive the price of containers upwards accordingly, the company said.
Teo Siong Seng, Chairman of Singamas, said, "In 2014, good demand for new containers has improved the total revenue of the Group. However, the decline in the average selling price (ASP) of containers has moderated the Group's profit performance inevitably. Nevertheless, our production capabilities have been further enhanced, allowing the refrigerated container factory in Qidong to achieve operational breakeven point in the second half of 2014. Besides, through further automation of various manufacturing activities, the Group has effectively controlled the labour costs."
“There are several positive developments that suggest the new financial year will present greater opportunities for the container industry,” Singamas said in a statement to the Hong Kong stock exchange on Monday.
“The replacement cycle of old containers will gather pace as the performance of shipping companies stabilize. Yet another potential stimulus is the decline in the price of petroleum during 2014, which in turn has freed up capital for shipping companies to acquire more containers,” Singamas said.
