Singamas Container stock rises 11pc after profit jump
Shares in Singamas Container Holdings rose more than 11 per cent yesterday after the firm saw net profit climb by 49.8 per cent to a record US$138.6 million last year, up from the earlier record of US$92.5 million in 2010. The firm's stock closed 11.3 per cent up at HK$2.26.
Revenue rose 32.4 per cent to US$1.8 billion, of which 98 per cent came from container manufacturing and 2 per cent from logistics and terminals. Singamas is the world's second-largest maker of shipping containers, with 21 per cent of the market - behind Cosco Pacific's China International Marine Containers, with 49 per cent.
Teo Siong Seng, the firm's president and chief executive, remains upbeat about prospects this year following renewed demand for new containers this month. 'Our factories are fully booked in May and we are now accepting bookings for June,' he said. Teo said the average selling price of a 20-foot dry-freight container was currently US$2,400, but this was expected to rise to more than US$2,500 for containers produced from June and to about US$2,600 by September.
He said the firm's 11 mainland container-making plants produced 648,014 teu (20-foot equivalent units) last year, compared with a total production capacity of 850,000 teu. Capacity will increase to 1.2 million teu by the end of this year when a new container manufacturing complex is completed at Qidong near Nantong in Jiangsu province. Teo said the facility, which has been financed by a US$150 million four-year term loan agreed last year, would replace three older factories in Shanghai capable of making 220,000 teu a year.
Teo pointed out container ships totalling 3.84 million teu were due to be delivered by the end of 2015 which would require an extra eight million teu. This is in addition to the 1.5-2.1 million teu, equivalent to 5-7 per cent of the global container fleet, that are forecast to be replaced each year.
Singamas also aimed to derive 40 to50 per cent of its revenue from higher- margin specialist containers by 2015, compared with 34 per cent last year.