A warning that a first half loss is in prospect has been issued by Oslo listed Jinhui Shipping and Transportation and its Hong London quoted parent company, Jinhui Holdings.
Jinhui, one of the largest supramax owners with a fleet of 36 vessels, is telling shareholders that it expects to be in the red for the six months to the end of June.
The profit warning is based on preliminary unaudited management accounts as the first half and second quarter result is not due to be announced until late August.
Jinhui made a poor start to the current year with a $3.3m first quarter loss disclosed in May.
In a stock exchange notification Ng Siu Fai, who is chairman of both Jinhui companies, said the loss was “primarily attributable to an unexpected weak freight market due to a reduction in dry seaborne trade volume in the first half of 2014.”
He attributed the weak demand to a slowdown in the Chinese economy as well as general geopolitical developments, while the ample availability of shipping finance in the past months has also encouraged an unanticipated supply side increase.
And rather ominously Ng warns “shareholders and potential investors are advised to exercise caution when dealing in the shares of the company.”
The Jinhui profit warning says management will closely monitor the situation and cautiously adjust strategy to respond to the long term outlook for the dry bulk shipping market.
