Samudera Shipping H2 profit down 77% to US$34.6 million on lower freight rates

Samudera Shipping posted a 77 per cent drop in net profit to US$34.6 million for its second half year ended Dec 31, 2023, from US$150.3 million in the previous corresponding period.

This came with revenue falling 46.1 per cent to US$277 million, based on the carrier’s regulatory filing released on Tuesday (Feb 27).

For the full year, net profit was down 68.6 per cent to US$101.2 million, while revenue fell 41.2 per cent to US$582.9 million. Earnings per share for FY2023 stood at US$0.1881, down from US$0.5985 the previous year.

Revenue drops in both H2 and FY2023 were attributed to lower freight rates specifically in the container shipping segment, said the mainboard-listed company, a unit of Jakarta-listed Samudera Indonesia. “While container volume handled was marginally higher year on year for both periods, average freight rates had declined during the financial year from the pandemic-driven highs.”

The group expects the operating conditions in the container shipping industry to remain challenging, amid disruptions to vessel availability and port congestions wrought by the Red Sea conflict.

“The group thus expects freight rates and vessel charter rates to be volatile in the near term.

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“Meanwhile, stronger demand for bunker fuel as vessels reroute to bypass the conflict is expected to put upward pressure on bunker costs.”

The board declared a special dividend of S$0.08 per share and a final dividend of S$0.01, without releasing the payment date and books closure date.

Shares of Samudera Shipping : S56 0% were trading up 4.2 per cent, or S$0.03, to S$0.74 as at 9.10 am on Wednesday, after its results released.