SINGAPORE - An improving bulk carrier market bolstered the third-quarter bottom line for South Korea's bulk carrier, Pan Ocean Co.
The Singapore-listed bulk carrier posted a 4.4 per cent increase in net profit for the quarter ended Sept 30 to US$39.04 million (S$54 million) on higher revenue from its shipping operations.
Earnings per share for Q3 was 20 US cents, compared to 16 US cents for the corresponding quarter last year.
Its third-quarter sales jumped 33.9 per cent to US$690.32 million.
This was partly offset by a 37.3 per cent increase in cost of sales to US$624.35 million.
Its finance income more than doubled to US$3.03 million, but its finance costs also climbed 11.4 per cent to US$13.91 million.
Other non-operating loss for Q3 was US$1.75 million, a reversal from other non-operating income of US$2.92 million for the same quarter the previous year.
Its nine-month net profit went up by 30.4 per cent to US$108.63 million.
Pan Ocean said that as in 2017, demand is expected to expand faster than supply in the bulk carrier segment this year. This is supported by continuing demand growth for commodities on the back of stable economic growth.
The global economy will expand by 3.7 per cent for 2018-2019, unchanged from 2017, the bulk carrier noted, citing an Oct 9 forecast released by the International Monetary Fund.
On the flip side, deliveries of newbuild bulk carriers continued to decrease, curtailing supply growth. For the first quarter of this year, newbuilding deliveries reached 22.7 million deadweight tonnes, 35 per cent lower compared to the same period in 2017.
Drawing on these observations, Pan Ocean concluded that earnings for bulk carriers are expected to improve for the rest of 2018.