Singapore Shipping Corp’s net profit surges 136.9% YoY to US$4.2m

Operating costs were lower than expected.

Singapore Shipping Corp (SSC), a spin-off from what used to be Hai Sun Hup Group Ltd, delivered stellar results in the second quarter of FY16, reported RHB. Net profit surged 136.9% YoY and 39.7% QoQ to US$4.2m thanks to the absence of one-off items such as a vessel that was off hire for dry-docking, and one-off crew hiring and training costs for the newly delivered vessel.

In the first half alone of the financial year, SSC generated US$12.6m of net operating cash flow, which is equivalent to about two-thirds of the cost of a second-hand vessel. Management also indicated that new vessel purchases would come with favorable contract terms like long-term charters, blue-chip customers, and solid returns comparable to current vessels. This leads RHB to posit that a new vessel with favourable terms is on the horizon, and that SSC is capable of making such a purchase without raising any equity.