Goldenport Holdings Inc reported a net loss of USD14.7 million in the first six months of 2015, significantly wider than the USD1.4 million net loss a year earlier as revenue fell by a quarter to USD18.5 million from USD24.7 million.
Earnings before interest, tax, depreciation and amortisation came in at USD4.4 million, over a 40% fall from USD7.6 million.
"For the six months ended 30 June 2015, the Company reported a 25.2% decline in revenues, reflecting a decrease in the average number of vessels from 15 to 13, and a 14.2% reduction in the time charter equivalent rate for the fleet that was partly offset in dollar terms by a reduction in average daily operating expenses," says a CEO Statement.
Revenue fell after the company reduced its fleet of trucks and container vessels. It only had 13 container vessels in the first half compared to 15 a year ago as older ships were decommissioned. The company said it does not plan to decommission any more ships in the coming months.
The dry bulk sector remained at a 30-year low in the first half of 2015 due to lower volumes, primarily as a result of a global reduction in coal shipments, particularly for Chinese imports. The rally that started in the middle of June on the back of restocking of Chinese iron ore inventories was unfortunately short-lived and ended in the beginning of August with dry bulk charter rates giving up most of their gains over the last four weeks, says the statement.
"However, the reduction in fleet size that has strengthened the liquidity position of the company, has also taken its toll on its cash flow generation capacity, and we will continue to face challenges in the event that dry cargo charter rates do not improve," it said.
"The market outlook remains fairly muted and volatile due to uncertainties over Brazilian exports and Chinese demand, as well as the overhang from a large number of newbuilding vessels that are due to be delivered until the end of 2016," it said in a statement.
"There is a glimmer of hope for 2017, provided that owners continue to resist tempting approaches from loss-making shipyards and, hence, new-building ordering activity remains subdued," it added.
We are navigating through what is arguably the worst dry bulk market of the last 30 years and the long-awaited, sustainable recovery is unlikely to materialize in the near term. We have taken all steps available to us to position the Company to weather the current storm, including proceeding with the sale of several older and less efficient vessels, restructuring our bank facilities to reflect the current trading environment and de-levering our balance sheet, while maintaining a competitive operating cost base, says the statement.
However, the reduction in fleet size that has strengthened the liquidity position of the Company, has also taken its toll on its cash flow generation capacity, and we will continue to face challenges in the event that dry cargo charter rates do not improve.
