Japanese bulker player Uni-Asia Group has reported a 74% year-on-year decline in first-half profit, figures just released show.
Singapore’s only listed bulker owner made $4.2m in the first six months of 2023 against the $16.5m achieved 12 months earlier.
Interim revenue was down 39% to $29.7m, while the group’s operating expenses declined by 22% to $22.3m due to reduced employee benefit expenses and vessel operating expenses.
The company’s fleet of 10 handysize bulkers earned an average charter rate of $11,595 per day for the first half of 2023.
“The dry bulk shipping industry has encountered significant challenges in the past quarters, with the downward trajectory that originated in the second half of 2022 continuing throughout the first half of 2023,” Uni-Asia said.
“The market’s weakness has been attributed to multiple factors, including a softening of dry bulk seaborne trade resulting from widespread economic headwinds.
“Moreover, the ongoing Russia-Ukraine war has severely disrupted global agricultural trade, leading to a breakdown of the Black Sea grain trade.
“Climate change-induced weather conditions have also compounded the industry’s difficulties, impacting global soft commodities trade,” the shipowner said.
Despite these headwinds affecting demand, Uni-Asia said the dry bulk shipping industry has witnessed some encouraging developments on the supply side.
“Notably, shipowners are hesitant in placing significant new dry bulk shipbuilding orders, influenced by factors such as increasing US interest rates, high construction costs, and uncertainties surrounding new environmental regulations,” it said.
“Additionally, the introduction of the global Energy Efficiency Existing Ship Index (EEXI) by the IMO has reduced ship's maximum speed capability, thereby limiting vessels’ ability to respond swiftly to potential demand increases.”
Uni-Asia has declared an interim dividend of SGD 0.022 (1.6 US cents) per ordinary share, which represents a 30% dividend payout ratio.
Separately, the company announced that current chief executive Kenji Fukuyado is set to retire in February 2024. He will be replaced by current company executive Masahiro Iwabuchi.
Fukuyado first joined the group in 2001 and had since held various management appointments within the group before being appointed chief executive in 2020.
Iwabuchi has been with the group since it was established in 1997 and has held various management appointments within the group since then.
Uni-Asia said he has “extensive experience” in the banking industry and has worked in various parts of Asia, including Japan, Indonesia, Singapore, Hong Kong and China.
Uni-Asia became the only bulker owner listed on the SGX after South Korean shipowner Pan Ocean delisted its shares in June 2021.
