THE Far East market for containers remains sluggish but deliveries of new containers from South Korean factories to lessors had picked up in recent weeks, says Sea Containers president James Sherwood.
He said the company had acquired US$39 million of container assets during the six months ended June 30, and felt the minimum target of $75 million of container asset purchases was likely to be reached for the year.
Lease-outs increased significantly in June and selective equipment shortages were occurring in Europe, Mr Sherwood said, adding that the company had raised $225 million of unsecured, long-term debt in the US capital markets in recent months at an averageinterest rate of about 11 per cent.
The bulk of the funds has been earmarked for new investments, but some also has been used to reduce the company's main revolving syndicated credit which had a cost of about five per cent a year, he said.
The interest differential had been apportioned to the company's container leasing and ferries businesses, reducing earnings from these activities until the funds were fully invested, he said.
Sea Containers reported a 31 per cent rise in net profits for the first six months of the year, despite a drop in earnings from its ferry and port operations in the second quarter.
