Heavy impairment charges made a deep impact on Jinhui Shipping & Transportation’s annual result, which sank to a deeper loss.
The Oslo-listed shipowner recognised a $14m impairment loss on its owned fleet of supramax bulkers plus a loss of $5.7m on right-of-use assets. This is almost half as much as was recognised in impairments in 2022, following the sale of several older ships last year.
This led to Jinhui booking a loss of $28m for the fourth quarter, which equates to a $0.254 loss per share.
Jinhui recorded a $55m annual loss, compared with a loss of $7.1m the previous year. The 2022 result included a $49.3m impairment loss on owned vessels.
Revenue for the year fell 46% to $81.9m compared with 2022.
Jinhui described 2023 as a “rocky year” due to slowing economic growth and pressure from inflation.
“We continue to stay alert to the increasingly frequent economic, geopolitical, or other unforeseen surprises that can trigger volatility to our business performance, as well as the carrying value of our shipping assets and financial assets,” it said in its annual report.
“We currently have no newbuilding contracts, and are likely to focus on suitable secondhand tonnage opportunities.”
The average age of Jinhui’s owned bulkers is 13.7 years, slightly older than the industry average of 11.9 years for handymaxes, according to Clarksons data.
The Chinese shipowner, which is controlled by the Ng family, is out to modernise its fleet of bulkers and earlier this month said it would not rule out further sales of its older vessels.
The company has sold off six of its older supramaxes and two post-panamaxes over the past two years or so.
Last week, Jinhui confirmed its purchase of a modern kamsarmax from Nisshin Shipping of Japan and has agreed to pay $31.1m for the 81,567-dwt Vincent Trader (built 2019).
The acquisition follows soon after Jinhui’s announcement earlier this month that it has signed a deal to buy its first capesize bulker, the Japanese-built, 181,300-dwt New Delight (built 2012), from Hsin Chien Marine for $30.95m.
