Samudera's profit plunges 32% on higher costs
$8.54m profit for FY2003 despite higher freight rates


[SINGAPORE] Singapore-listed regional carrier Samudera Shipping's FY2003 net profit fell 32 per cent, hit by skyrocketing charter rates and higher costs that offset rate restorations.

Samudera reported a $8.54 million net profit despite 2.8 per cent higher turnover of $505 million, and 12 per cent higher container volumes for the year ended Dec 31, 2003.

'Despite a freight rate restoration in Q4 2003, the container shipping industry remained competitive throughout. The incremental freight rates are still lower than the average freight reduction since the beginning of 2003,' Samudera said, adding that higher costs in charter hire, bunkers, vessel operations and third party freight charge, coupled with the weak US dollar, had hit the bottom line.

It further predicted that gains from the latest rate restoration, which will impact this year, will be 'negated by any increase in vessels charter hire rate, which is expected to remain strong in 2004'.

Its earnings were also affected by an exceptional gain of $2.7 million in FY2002 from the sale of its shares in an associated company.

Samudera said it would 'continue exploring slot swaps and joint operations with partners' to maximise operational efficiencies.

Samudera, which ships containers around Southeast Asia, China, India and the Middle East, said its higher turnover came predominantly from six additional ships and three barges deployed in its industrial shipping division and its new agency and forwarding businesses in the United Arab Emirates (UAE) and Malaysia. Samudera warned that with most of Asia holding federal elections this year, political uncertainties, coupled with broader global uncertainties 'owing to potential threats such as terrorism and nuclear programme' could impact trade and the shipping group's 2004 earnings.

Last week, Samudera sold two small container ships with a disposal gain of $2.98 million which it plans to use to buy younger vessels and finance the group's business expansion.
In addition to last year's set up of Malaysian and UAE subsidiaries, Samudera opened an India agency, and is in the process of adding one to Thailand.


By BETH JINKS