Jinhui Shipping and Transportation, the Oslo-listed, Hong Kong headquartered shipping firm, saw net profit slump 75 per cent to US$8.84 million in the first quarter of this year, down from US$35.67 million a year earlier. Revenue fell 33 per cent to US$58.52 million, down from US$86.97 million in the first quarter of last year.
The declines come after high-earning charter contracts ended and Jinhui Shipping had to charter out ships at lower rates, including agreements for two loss-making contracts.
The firm, and its parent company, Jinhui Holdings, warned earlier this month that both companies would post a significant decline in net profit in the first quarter. The warnings led the share price of both to tumble.
Shares in Jinhui Holdings, which owns 54.77 per cent of Jinhui Shipping, dropped more than 6 per cent yesterday, before Jinhui Shipping's quarterly results were released. The stock later recovered to end 1.48 per cent down at HK$1.33.
Chairman Ng Siu-fai said the operating environment for dry bulk shipping was 'extremely harsh' in the first quarter as market freight rates fell close to or below some shipowners' cash break-even levels.
He said two dry bulk Capesize ships, which can carry about 170,000 tonnes of iron ore or coal, were chartered to other operators at a loss last June after the previous high earning contracts were terminated.
