Hong Kong-based supramax specialist Jinhui Shipping and Transportation reported a loss for 2020 amid a 25% drop in revenue.
But the Oslo-listed company posted a booming fourth-quarter profit based in large part on financial gains rather than shipping.
The shipowner, which is majority owned by Hong Kong-listed Jinhui Holdings and controlled by brothers Ng Siu Fai and Thomas Ng Kam Wah, logged a consolidated net loss of $15.25m, down from a consolidated net profit of $4.5m in 2019.
In its preliminary annual results announcement, the company explained its full-year slump in both profit and revenue mainly with reference to direct and indirect effects of Covid-19.
Jinhui said the drivers for loss were the effect of the pandemic on business sentiment and, thus, on chartering and freight revenue, unrealised losses on the value of financial assets and an increase in shipping-related expenses, including expenses that resulted from pandemic-related operational delays.
Full year revenue of $47.12m was down from the previous annual figure of $63.16m.
Revenue for the fourth quarter of 2020 fell from $19.79m to $15.14m in the same period of 2019, but the quarterly consolidated net profit figure surged from $5.65m to $7.55m.
That fourth-quarter improvement shows the results of the dry bulk rally that was getting underway late last year, but is mostly an effect of non-shipping financial investments.
More legs to stand on
During the reporting period, Jinhui owned a fleet of two post-panamax and 17 supramax bulkers. That includes the 50,300-dwt Atlantica (built 2001), which it purchased for $3.95m from Alloceans in July.
The fleet has subsequently been trimmed by one supramax. The 50,800-dwt Jin Ping (built 2002) was sold in December for $5.5m and delivered in January to Hong Kong Xinfeng Shipping — a one-ship international platform for a mainland Chinese shipowner.
Jinhui's average time-charter equivalent (TCE) earnings fell from $9,533 per day to $7,269 per day for the full year. For the fourth quarter, Jinhui's TCE earnings fell from $11,419 per day to $9,487 per day a year earlier.
But Jinhui has more legs to stand on than shipping. The company has significant investments and other financial holdings.
In the quarter just gone, Jinhui reported a net gain on financial assets at fair value of some $5.26m, which it puts down to Asia's rebounding financial markets. The comparable figure for the fourth quarter of 2019 was $2.90m.
Jinhui's non-shipping holdings currently include $39.78m in listed securities held for trading, a $10.37m unlisted share stake in a Shanghai office tower, $29.50m-worth of other property investments and $33.36m in net loan receivables.
