Singamas Container : Announces 2014 Annual Results

Microsoft Word - Singamas_2014 Annual Results Press Release_Eng_20150323

[For Immediate Release]

SINGAMAS ANNOUNCES 2014 ANNUAL RESULTS

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GOOD CONTAINER DEMAND DRIVES REVENUE GROWTH

(Hong Kong, 23 March 2015) - World-leading container manufacturer and logistics services provider Singamas Container Holdings Limited ("Singamas" / the "Group") (stock code: 716) has today announced its annual results for the year ended 31 December 2014.
The Group recorded consolidated revenue of US$1,546,483,000 (2013: US$1,282,988,000). Consolidated net profit attributable to owners of the Company amounted to US$28,021,000 (2013: US$34,274,000) for the reporting year. Basic earnings per share amounted to US1.16 cents (2013: US1.42 cents).
The Group proposes to pay a final dividend of HK1.5 cents per ordinary share (2013: HK1 cent). Together with the interim dividend of HK1.5 cents per ordinary share (2013: HK3 cents), the total dividend for the year is to be HK3 cents per ordinary share (2013: HK4 cents), representing a payout ratio for the year of approximate 33.4 %.
Mr. Teo Siong Seng, Chairman of Singamas, said, "In 2014, good demand for new containers has improved the total revenue of the Group. However, the decline in the average selling price ("ASP") of containers has moderated the Group's profit performance inevitably. Nevertheless, our production capabilities have been further enhanced, allowing the refrigerated container factory in Qidong to achieve operational breakeven point in the second half of 2014. Besides, through further automation of various manufacturing activities, the Group has effectively controlled the labour costs."
MANUFACTURING
Manufacturing continued to be the Group's key revenue driver, accounting for 98% of the Group's total revenue in 2014. New container demand experienced an increase as reflected by revenue of US$1,515,408,000 recorded for the reporting year (2013: US$1,253,879,000). This upturn was encouraged by improving economic conditions in the United States, greater number of large container vessel deliveries and the need for replacement containers. However, the increase in demand was tempered by a decline in the ASP of 20' dry freight containers, which slipped to US$2,086 compared with US$2,195 in 2013. The drop reflected the decline in raw material prices, particularly corten steel price. Profit before taxation and non-controlling interests amounted to US$45,546,000 (2013: US$46,688,000, which included a one-off gain of US$9,793,000 from the disposal of two factories in Shunde). Total production volume increased to 686,474 twenty-foot equivalent units ("TEUs") by the close of the reporting year (2013: 525,449 TEUs). Total sales volume reached 683,007 TEUs versus
542,442 TEUs in 2013.

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Singamas Container Holdings Limited Announces 2014 Annual Results

23 March 2015

Revenue contributions from dry freight containers and specialised containers were 70.6% and 29.4% respectively, compared with 73.7% and 26.3% respectively in 2013. The production of 53' US domestic containers surged during the review year, driven by the economic recovery in the United States, with orders doubling that of 2013.
With respect to specialised containers, the Group's offshore container interest was further boosted in the first quarter of the financial year when it invested into the restructured Modex Group, which specialises in the manufacturing, trading and leasing of offshore containers. Moreover, the first batch of offshore containers produced by Qidong Singamas Offshore Equipment Co., Ltd was completed in May 2014. Performance of this new facility in Qidong has been encouraging, with over 1,400 offshore containers completed by the end of the reporting year.
The refrigerated container factory in Qidong achieved operational breakeven point in the second half of 2014. The management believes that contributions from this factory will be positively reflected in the coming years once the production capacity has fully ramped up.
LOGISTICS SERVICES
Logistics segment recorded revenue of US$31,075,000 in 2014 (2013: US$29,109,000). Profit before taxation and non-controlling interests amounted to US$6,978,000 (2013: US$10,459,000, which included a one-off gain of US$5,114,000 from the disposal of a depot in Shunde). The total number of containers handled amounted to approximately 3,170,000 TEUs during the reporting year against around 3,023,000 TEUs in 2013. Average daily container storage slightly dropped to 89,000 TEUs compared with 96,200 TEUs in 2013.
The Group has increased its shareholding in a depot in Xiamen, rising from 28% to 35% in early 2015. The increase in stake was motivated by the depot's encouraging performance and ability to provide steady income to the Group. Moreover, the Group will be able to derive benefit from Xiamen's geographical location, as well as preferential policies implemented by the Xiamen Government aimed at encouraging container manufacturing and development of the local port facilities.
PROSPECTS
Several positive developments have shown that the new financial year will present greater opportunities for the container industry. A significant number of ULTRA large container vessel deliveries are scheduled throughout 2015 to 2017, while the price of corten steel is expected to gradually rebound, which will drive the price of containers upwards accordingly. What is more, the replacement cycle of old containers will gather pace as the performance of shipping companies stabilise. Yet, another potential stimulus is the decline in the price of petroleum during 2014, which in turn has freed up capital for shipping companies to acquire more containers.

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Singamas Container Holdings Limited Announces 2014 Annual Results

23 March 2015

On 21 March 2015, the Group signed the Strategic Cooperation Framework Agreement with Guangxi Beibu Gulf International Port Group Ltd. to develop a container freight station in Guangxi and to explore further cooperation in container manufacturing and the cold chain logistic business. Guangxi is one of the provinces which has included in the construction of Silk Road Economic Belt and the
21st Century Maritime Silk Road, the management believes this investment project holds potential growth of the Group's logistic business going forward.
Mr. Teo concluded, "The Group will continue to optimise efficiency across all aspects of operation through ongoing automation complemented by various cost controls. Moreover, the strong financial position of Singamas has offered us strong confidence to cope with different market conditions and promptly respond to emerging opportunities that are expected in 2015."

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About Singamas Container Holdings Limited

Singamas is one of the world's leading container manufacturers and logistics services providers. Its manufacturing business covers twelve container factories located in the PRC. Its logistics operations include eleven container depots/ terminals, eight located in key locations in the PRC - Dalian, Tianjin, Qingdao, Shanghai, Qidong, Ningbo, Fuzhou and Xiamen, two in Hong Kong and one in Laemchabang, Thailand. It also runs a logistics company in Xiamen, the PRC. Riding on its comprehensive investment strategies, the Group is consolidating its market leadership in the global container industry. For details, please visit: www.singamas.com.

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