Sinotrans defies downturn

Sinotrans Shipping of Hong Kong generated a relatively healthy profit in the first-half of 2014, a period in which many of its rivals struggled to keep their heads above water.

The Hong Kong-quoted bulker, tanker and containership operator reported net income of $10m for the six months to 30 June, versus a gain of $1.6m in the comparable leg of 2013.

Despite lacklustre freight rates in the company’s core market revenues rose to $112.7m from $93.5m during the period, which amounts to an increase of 20.6% year-on-year.

In the operator’s earnings report it said the shipping industry “showed no signs of recovery” during the first-half and admitted that the “overall situation remained challenging”.

“Although the international trade maintained moderate growth with slow economic recovery across the world, dry bulk seaborne demand lost momentum on account of the decelerating economic growth of China and other emerging economies,” it continued.

Sinotrans said it was able to defy the downturn by focusing on what it described as “fleet structure optimisation” and “business deployment enhancement” under a broader bid to reduce costs, a strategy that will likely continue in the months ahead.

“In view of such complicated and ever-changing market situation, our group has taken a more proactive approach to differentiate ourselves from the competition,” the owner added in an overview contained in today’s earnings update.

 “Sticking to our principle of stable operation, we thrived to keep up with the market trend through enhancing flexibility in the timing of fleet chartering, leveraging on our network advantages and adopting a diversified operation strategy.”

Sinotrans ordered a series of “eco” bulkers during the period and scrapped a pair of ageing ships as well. At the end of the first-half the owner boasted a fleet of 44 bulkers, five containerships one VLCC in addition to ten newbuildings that will start hitting the water in 2015.