Jinhui Shipping and Transportation posted a huge jump in profit last year as it didn't repeat vessel impairment losses it had booked during 2020.
The supramax specialist reported a net profit for 2021 of $194.2m against a loss of $15.25m seen in the previous financial year, according to figures released on Monday.
Jinhui's 2020 result included $133.6m in impairments.
Non-accounting items, however, helped drive profitability as well. Operational revenue surged by 178% in 2021 to just over $131m, as the company benefited from strong freight markets and an expanded fleet.
Jinhui said its vessels saw their average daily time charter equivalent (TCE) rate improve 165% year-on-year to $19,233 against the $7,269 seen in 2020.
“The consolidated net profit for the year was mainly attributable to the remarkable rebound in dry bulk shipping market as seaborne trade activities gradually recovered since late 2020 and the increase in number of owned vessels that led to a significant increase in the chartering freight and hire revenue for the year 2021,” Jinhui said.
For the fourth quarter of 2021, Jinhui’s net profit was $84m against the $7.5m seen 12 months earlier. Revenue was up 181% year-on-year to $42.6m.
During the year, Jinhui entered into agreements to acquire eight vessels worth over $110m. To date it has taken delivery of six of them.
The shipowner said it has not ruled out further vessel acquisitions, given the remarkable rebound in the dry bulk market.
At the end of the year, the fleet stood at 24 dry bulk vessels comprised of 22 grabs-fitted supramaxes and two post-panamaxes.
“2021 has been a good year for dry bulk shipping with robust freight rates driven by a general increase in demand for commodities worldwide, increase in logistics complexity due to procedures to battle the pandemic as well as limited new vessel supply,” Jinhui said.
“As we entered 2022, there has been some corrections in the freight market in recent weeks, affected by multiple issues from seasonal trading patterns, decrease in industrial activity during the Beijing Olympics, volatility in commodity prices, to continued disruptions in global supply chains.”
Looking ahead, Jinhui said it expected few newbuilding orders, as there is no consensus in the industry yet with regards to the next-generation engine design to reduce carbon emissions.
“This potentially highly favourable demand and supply dynamics is expected to continue, where our fleet is well positioned to benefit,” it added.
