Jinhui Shipping and Transportation has admitted it is finding it difficult to plan for the future while the global economic picture looks uncertain.
"We see that the trade tension is the biggest overhang that's affecting the sentiment in the shipping market," Raymond Ching, Jinhui's vice-president, said during a conference call with investors on Thursday.
"There's a general fear of a global economic slowdown, which translates to weakness in demand in our industry."
Jinhui doesn't want to commit to a plan, given that both shipping markets and the global economy are expected to be "volatile" in the coming months, Ching said.
"We want to remain flexible and nimble," he said.
"But the low number of newbuilding orders, we believe, is going to give the market strong support at the bottom or the low end."
Asset playtime is over
Jinhui is focusing its investments in securities rather than asset plays for the moment, Ching said.
He alluded to the fact that the company was forced to terminate its purchase of one of two supramaxes from Chartworld Shipping of Greece in June this year.
Instead, Jinhui is putting money into what Ching described as "yield enhancement securities" that will mature at the same time as a sizeable chunk of Jinhui's existing debt and will provide some "positive cashflows" for the company.
The shipowner's total debt as of 30 June is $118m, which is $28m more than at the same point in 2018.
Of this debt, 48% is payable within the first year, according to Jinhui's second-quarter presentation.
Ching said Jinhui would continue to look for "attractive" securities opportunities "if the macroeconomic environment isn't too discouraging".
Chartworld delivered one of the supramaxes to Jinhui in May, but the buyer was forced to cancel its purchase of the second vessel because Chartworld was unable to deliver the ship on time.
Jinhui was refunded its initial deposit of $625,000 subsequently.
Second-quarter results
The Hong Kong-based bulker owner posted a net loss of $1.1m during the second quarter, which equates to a basic loss per share of $0.01.
This is down by 140% compared to the same quarter last year, when Jinhui recorded profit of $2.84m and earnings of $0.026 per share.Revenue has fallen by 37% from $22.1m last year to $14.0m this past quarter.
The drop in revenue was due to the weaker freight environment and a reduction in owned vessels, which over the past 12 months has fallen to 19 from 23 ships, Ching said during the company's conference call.
