Samudera full-year profit falls 22% on higher costs; to pay out 0.75 cent per share

SINGAPORE - Samudera Shipping Line's net profit fell 21.5 per cent to US$8.3 million in 2018, dragged down by higher costs of sales and expenses despite better revenue.

Earnings per share for the year ended Dec 31, 2018, was 1.54 US cents, down from a year-ago 1.96 US cents, the shipping company announced on Thursday. Samudera is declaring a final dividend of 0.75 cent per share, the same as a year ago. The stock closed at 16.6 cents on Thursday before the results were announced.

Revenue rose 9.8 per cent to US$422.3 million during the year due to higher contributions from the container shipping segment. Container volume handled rose 13.7 per cent to 1.47 million 20-foot equivalent units (TEU) during the year, which raised container shipping revenue by 11.2 per cent to US$390.9 million. Bulk and tanker revenue, however, shrank 17.8 per cent to US$22.1 million as a result of a smaller tanker fleet.

Container shipping and agency and logistics revenue from Indonesia rose 13.6 per cent, or US$13.3 million, to US$111 million. In South-east Asia excluding Indonesia, turnover from the same segment grew 7.5 per cent to US$183.7 million, while in the Middle East and the Indian sub-continent it increased 17.1 per cent to US$83.5 million.

Cost of sales rose 10.6 per cent to US$400.7 million amid higher charter-hire rates and bunker prices, pulling gross profit down to US$21.6 million, a 3 per cent decline.

Marketing, administrative and other operating expenses grew by a combined 11.7 per cent to US$15.1 million, further eroding the bottom line.

Looking ahead, the company said that the outlook on the regional container shipping industry for 2019 is uncertain, with US-China trade friction potentially adding complications to the operating environment. Concerns about a China slowdown have also weighed on the prospects in the dry bulk sector, and charter rates for bulk carriers have softened since the start of 2019.

The November 2018 arrest of Samudera's Sinar Kapuas dry-bulk vessel in Honduras could have a negative US$1.7 million impact on 2019 financials on the basis of the vessel being released on March 15, 2019, the company said. The company and its insurer are in the process of trying to get the vessel released in March 2019, although the process is taking longer than expected, Samudera said.