[300711.EN.SEA] Samudera's Q2 Profit Rises To US$1.6 Million

SAMUDERA Shipping Line has registered a profit after tax in the second quarter of US$1.6 million, compared to US$600,000 earned in the same quarter a year ago.

A statement said the group saw improvements in revenue in all its business segments, including the regional container shipping segment that provides intra-Asia shipping services and the Indonesia domestic container shipping that links the islands within Indonesia, bulk and tankers.

The overall revenue of the group for the second quarter rose by 29.6 per cent to $116.6 million compared to the second quarter in 2010, while the cost of service surged by 29.4 per cent to $109.4 million largely due to higher bunker prices, firmer charter-hire rates, the weakening of US dollar and an increase in non-US dollar denominated operating cost, it said.

"In general, the shipping industry was still oppressed and faced with harsh challenges in the first half of 2011 due to the hike in bunker price and other operating costs," it said.

"Although the group's overall volume for the regional container shipping experienced a marginal increase of 4.6 per cent, the increased in revenue was largely due to the implementation of bunker and other surcharges.

"The regional container shipping segment was still adversely affected by the persistent high bunker prices (maintained at above $600/mt level compared to $400/mt in the previous corresponding period) and increased in charter-hire rates for the renewed fleet in 2Q11. As a result, the regional container shipping segment had suffered losses in the first two quarters of 2011."

On the other hand, domestic box shipping volumes in Indonesia rose by 38.8 per cent and its revenue by 99.6 per cent.
During the reporting period, the segment experienced significant improvement in its performance on the back of improved freight rates, higher load factors, shorter vessel turnaround time and a series of service expansion and market penetration. With the significant contribution from Indonesia domestic container shipping, the group managed to record a profit in second quarter.

David Batubara, executive director and CEO, said: "The horizon remains volatile and challenging ahead and we will continue to keep a close watch on the market conditions and adapt our strategies accordingly."

It noted that the shipping industry continues to face stiff headwinds from persistently high bunker prices and oversupply of ship capacity in the market. To help mitigate some of these cost pressures, the group will continue to implement bunker recovery surcharges as well as to focus on making cost efficient operations possible without sacrificing volume and market share.

Going forward, the group said it will continue to focus on its domestic container shipping business, as better margins and pricing power should benefit the group over the longer term.

Source : HKSG, 27.07.11.