Jinhui posts H1 profit warning


Jinhui Shipping and Transportation has announced a profit warning ahead of its first half results.

"Based on a preliminary review of the unaudited consolidated management accounts, the company is expected to record a consolidated net loss for the six months ended 30 June 2014 as compared to a consolidated net profit for the six months ended 30 June 2013," Jinhui said in a stock market announcement, blaming the poor performance on a weak freight market.

"The expected consolidated net loss for the period was primarily attributable to an unexpected weak freight market due to a reduction in dry seaborne trade volume in the first half of 2014," the company said.Jinhui added that slowing dry bulk commodities demand was primarily caused by a slowdown of Chinese economic activities as well as other geopolitical events. In addition, the ample availability of shipping finance in the past months also prompted an unanticipated increase in the supply side.

"A byproduct of global quantitative easing, this over-extension of credit in the shipping industry only slowed down recently partly due to the crackdown of commodity-backed lending in China," Jinhui noted.

The company said that management "will closely monitor all factors that may affect the long term global freight market fundamentals and will cautiously adjust the strategy according to management’s expectation of the long term outlook of the dry bulk shipping market."

Source from : Seatrade Global