KUCHING: Shin Yang Shipping Corporation Bhd (Shin Yang) foresees domestic and coastal shipping as a driving growth in anticipation of the coming Pan-Borneo Highway projects as a further boost from the recent Budget 2016.
According to chairman Tan Sri Datuk Ling Chiong Ho in Shin Yang’s 2015 annual report, it was a year full of anxieties and economic uncertainties, especially with the crude oil price having plunged by more than half due to the global crude oil supply issue.
Ling noted that this was further deepened with the economic uncertainties in the US and European countries and political tensions arising in the Middle East regions.
He further noted that the international shipping market is facing a severe situation in dry bulk shipping due to plunging rates for carrying commodity products.
“Furthermore, shipbuilding the oil and gas sector was at its lower path due to downsizing or minimization of their capital expenditures toward the oil and gas industry players,” Ling said.
“We foresee domestic and coastal shipping as a driving growth in anticipation of the coming Pan-Borneo Highway projects as a further boost from the recent Budget 2016.
“In order to sustain in the shipping industry, it must be able to stand firm to its commitments and responsibilities.”
For the year ended June 30, 2015 (FY15), Shin Yang had registered a gross profit and net profit after tax of RM79.1 million and RM5.2 million respectively with an earnings per share of 0.43 sen per share as compared to 0.61 sen per share in the previous year.
Ling noted that the decrease in earnings was due to the lack lustre international shipping sector especially with the lower shipment volume to the Far East regions.
He said that the shipbuilding activities showed a sustainable margin with 19 completed vessels successfully delivered to the owners from the oil and gas sector and resource based sectors, while domestic and coastal shipping also showed a much improved segment profit of RM31.9 million as compared to RM13.1 million in 2014.
Despite the economic challenges faced by many shipping companies, Shin Yang reported that the reduction of crude oil price had resulted in a cost reduction on bunker fuel to the group’s shipping sectors.
“Furthermore, the strength of the domestic economy and development and balanced consolidation of our business activities would continue to guide us to revenue earning and business achievements,” Ling said.
Ling highlighted that the Sarawak Pan-Borneo Highway which is expected to be completed in Year 2021, would maintain the state as one of the top priorities for development, thus bringing about a lot of internal spring off business activities.
Hence, Shin Yang believes there is requirement for shipping logistics from the group’s container vessels, project use of barges and tug, dry and liquid bulk fleets plying South East Asian regions.
“In the shipbuilding sector, the emphasis is on taking steps to aggressively carry out repair and maintenance and fabrication works to meet the requirements of the niche markets from operating expenditures in the oil and gas industry and also to meet the potential requirements of the resource based sectors,” he said.
For Shin Yang’s Middle East sector, Ling pointed out that the shipment activities to Zakum Offshore Inlands Project in Abu Dhabi, United Arab Emirates have been completed ahead of schedule and that put the group’s reputation on the forefront.
“We foresee the potential further growth of these development projects in Abu Dhabi, Dubai, Kuwait and Qatar.
“The group had completed its capital expenditures for both vessel fleet additions and shipyard facilities plans.
“The challenge for the Group is to further improve its efficiency and productivity in both the fleets efficiency and shipbuilding activities.
“The group shall continue to work on achieving and realising the full use of its resources,” he added.
* Credit news article from: http://www.theborneopost.com/2016/01/26/shin-yang-foresees-domestic-coastal-shipping-as-growth-driver/