WITH the exception of Shanghai Haixing, Hong Kong-listed shipping companies have done well this year, riding the crest of a wave of rising freight rates. But the outlook has been clouded for the next year because freight rates have slumped, from near record highs to low levels not seen for a year, due to low demand and a glut of old ships. Container carrier Orient Overseas International Ltd and bulk-carrier operators IMC Holdings, Wah Kwong Shipping Holdings and Noble Group reported increases in profits for last year and interim profits for this year. Wah Kwong recorded a hefty 41.4 per cent increase in net profit for the year ending March, to US$52.6 million from US$37.2 million a year ago. Its operating profit rose 33.6 per cent, from US$40.15 million to US$53.66 million, on a turnover of US$133.56 million. The company operates a fleet of 22 vessels, ranging from handysize bulk carriers and product tankers, to Capesize vessels. Seven vessels are on order with Chinese and Japanese yards. Following new acquisitions and disposals this year, the average age of the fleet dropped to seven years from 13. Wah Kwong will start taking delivery of four 27,000 deadweight tonne (dwt) handysize bulk carriers, being built by a Shanghai yard, in the first quarter of next year. Two 44,000 dwt product carriers are being built at the Dalian Shipyard in China and one 150,000 dwt bulk carrier is being built by a Japanese yard for delivery early next year. After an attributable profit of $154.05 million (up 27 per cent) for last year, IMC Holdings came in with a 71 per cent increase in interim profit for the first six months of this year, to $144.45 million. Noble Group, which also trades commodities, recorded an 82 per cent increase in profit last year, from $41.37 million to $75.19 million. It did even better in the first six months and reported an interim profit of $77.47 million, up 119 per cent. The company, which was listed in June last year, saw interim turnover up 51 per cent to $2.2 billion. Brokers said that with prices yet to hit the floor, the market might decline until the end of the year when commodity contracts were renewed. A combination of factors reversed the good fortunes which the freight market had enjoyed since last year. First, there were signs that demand for steel products such as cars and consumer durables was slackening in major European economies, at a time when most plants still had huge stockpiles. This was bad news for the freight market because one-third of the vessels carry iron ore, the raw material for steel. The trade situation is even grimmer in Japan - a country that swallows about a third of the dry bulk-freight traffic. The Japanese economy is in the doldrums and huge coal and ore stockpiles mean importers are unlikely to tap commodity markets yet. China, once a major importer of coal and iron ore, is now exporting these commodities but its next moves are anyone's guess.