Red-hot bulker markets and an aggressive vessel acquisition strategy have helped Jinhui Shipping & Transportation shareholders post a set of stellar third-quarter results.
The Oslo and Hong Kong-listed supramax specialist reported a net profit of $19.3m — more than 22 times the profit achieved 12 months ago.
The shipowner reported a revenue of $40.4m, an increase of 183% versus the $14.2m in the same quarter in 2020.
Jinhui said it benefitted from the strong rebound in freight rates with the average daily time charter equivalent rates earned by its vessels increasing by 171% to $23,592 versus the $8,713 seen 12 months earlier.
"The improved operating result for the quarter was primarily due to the strong rebound of market freight rates … and the increase in the number of owned vessels that lead to a significant increase in the chartering freight and hire revenue for the third quarter," Jinhui said on Monday.
The shipowner has spent close to $60m on the acquisition of five bulkers since the start of the financial year, taking delivery of three of them.
This is in stark contrast to 2020, when the company said it was holding back on fleet renewal due to a lack of clarity over fast-moving decarbonisation regulation.
"Given the remarkable rebound in [the] dry bulk shipping market, the management reviewed the group's fleet and considered acquiring additional vessels could generate [a] steady stream of income for the group," Jinhui said.
At the end of the third quarter, Jinhui had a fleet of 21-owned vessels, which includes two modern post-panamaxes and 19 modern grab-fitted supramaxes.
Despite the strong quarterly performance, the company said it would not be paying a dividend to investors.
Looking ahead, Jinhui said there have been some corrections in the freight markets in recent weeks, affected by multiple issues from power shortages, volatility in commodity prices, to disruptions in global supply chains.
“When we look at the industry fundamentals, the supply of new vessels remains low and the industry outlook continues to point towards a relatively healthy freight market,” it said.
However, it added that measures to combat the spread of Covid-19 differ from country to country and can be relaxed or reinforced with little notice.
“Logistics of the transportation of goods and commodities has been affected throughout the year and disruptions are likely to continue to be present in the foreseeable future.”
