Singamas reports loss of US$27m as sales dive
Singamas Container Holdings, the world's second-largest container manufacturer, posted a first-half loss of US$27.4 million but predicted that demand for containers would gradually return to normal by next year.
Sales at Singamas tumbled 87 per cent year on year to US$99.46 million in the first six months as the economic crisis pared exports to the United States and Europe and dampened demand for containers.
As the prices of steel and containers plunged, the company also made a US$12.4 million provision for the raw material and the unsold containers.
Hong Kong-listed Singamas earned a US$13.6 million profit in the first six months of last year.
China International Marine Containers, the world's biggest container producer, also showed the effects of the crisis. It reported a 69 per cent drop in sales in the first half and posted a 353 million yuan (HK$400.55 million) loss from its container business. However, net profit was buoyed to 826 million yuan by a 1.39 billion yuan one-off disposal gain from securities investment.
Singamas, however, lacked any exceptional gains and the operating loss of its container division amounted to US$35.9 million on an 81 per cent drop in sales.
In respond to the dramatic decrease in the demand for containers, the company has reduced its manufacturing output by scaling back to a single production shift. This resulted in a 94.8 per cent decrease in container production in the first half to 18,243 20-foot equivalent units.
Specialised containers, including tank containers, were more resilient to the economic downturn, the company said. Tank containers, which carry liquid goods - from chemicals to red wine - sold for an average price of US$31,285 in the first half, nearly 15 times the price of a standard teu dry freight container, which cost US$2,131.
The stimulus packages, including increased value-added tax rebates, have lowered costs to exporters and have helped to boost export demand.
The economic crisis hit exports and slowed demand for containers
Singamas sales in the first six months was US$99.46 million, a decline of: 87%