SAMUDERA Shipping' s H1 net profit has increased more than five times on the back of higher freight rates and significant cost-management measures put in place by the group.

 

Net profit for the half-year ended June 30 was US$36.7 million, up from US$7.2 million a year ago. Earnings per share worked out to 6.83 US cents, up from 1.33 US cents.

 

The board has declared an interim dividend of 0.5 Singapore cent per share, to be paid on Aug 18. No dividend was declared for the corresponding period a year ago.

 

Revenue in H1 increased 19.6 per cent to US$209.1 million, driven by higher contribution from the container shipping business. Freight rates were higher, especially for carrier-owned container cargo, Samudera noted.

 

While demand for shipping services was strong, container volume handled only rose 8.1 per cent to 715,000 twenty-foot equivalent units.

 

The global port congestion situation arising from pandemic-related disruptions resulted in a shortage of capacity, the group said. Vessel turnaround time was longer, in conjunction with the volume growth in long-haul services.

 

Gross profit rose almost 3.5 times as Samudera worked to manage its cost of sales, which rose only 1.5 per cent in H1.

 

The group said it actively managed the utilisation of its container fleet and secured vessels on long-term charter in a timely manner.

 

Other operating income was US$2.2 million compared with US$702,000 a year ago. This was mainly due to proceeds of US$1.5 million received from the sale of ageing container boxes, as part of the group' s container fleet rejuvenation.

 

Samudera said the upward pressure on freight rates is expected to continue in the near term due to the global port congestion situation.

 

But such port delays and its associated cost impact, along with the volatile bunker price, could weigh on operating costs, the group added. The strong demand for container shipping services and the shortage of capacity have also driven an increase in vessel-charter rates.

 

Samudera said it has secured nine vessels on long-term charter to ensure the availability of capacity in the next 12 months to support its customers.