RCL Group reports profit growth of 139 % in 2017

Posted by Daily Shipping Times on 05-03-2018        Tweet

BANGKOK: RCL Group reported an increase in profit of 138.8% at THB 533.3 mn for the year 2017 against a loss of THB 1,375.9 mn in 2016. The profit was substantially driven by the Group's better quarter to quarter performance and its effective reduction in cost factors.

RCL's total revenues for the year 2017 grew 11% over 2016 to THB 11,713.8 mn. THB 114.7 mn gain on sales of assets and a reversal gain on provision for loss under onerous contracts which stood at THB 263.7 mn, were recorded for the year whereas there was no loss nor gain for the year 2016.

The gain on sales of assets was however noted to have gone up by 544.6% vis-à-vis 2016.

Total liftings from the two core businesses for year 2017 were 792,314 TEUs for Shipper Owned Container (SOC) and 1,109,507 TEUs for Carrier Owned Container (COC), representing a year-on-year increase of 8.1% and 5.8%, respectively.

SOC liftings in 4Q 2017 locked in 219,525 TEUs, a rise of 17% over 187,573 TEUs in 4Q 2016 and a 13% increase when compared to 194,188 TEUs in 3Q 2017. COC liftings of 295,152 TEUs for 4Q 2017 was an improvement of 5.5% against 279,682 TEUs for 4Q 2016, and was 1.6% more than 290,383 TEUs of 3Q 2017. As a result, total 4Q 2017 TEUs liftings amounted to 514,677, a 10% growth over and above Q4 2016 and was 6.2% higher, when compared with 3Q 2017.

Year-on-year average freight rate inched up 4.7% above that of the year 2016. 4Q 2017’s average freight rate ascended 10% better than 4Q 2016, although it was 3.2% lower than the previous quarter.

During the year, there was a 42.6% rise in bunker cost vis-à-vis 2016, and a quarter-to-quarter increase of 26.6% for 4Q 2017 and yet a 15.8% rise vis-vis in 3Q 2017, Against the above backdrop, RCL reported a year-on-year 7.8% increase in freight income of THB 11,252.4 mn, while total expenses posted was THB 11,267.5 mn, a reduction of 5.8%. These expenses comprised cost of freight & operations and administration cost, both of which were well managed as depicted by the savings of THB 481 mn (4.5%) and THB 53.2 mn (5.7%) respectively.

Moving forward, with improving economic conditions in Europe and the USA as well as throughout Asia, growth in export from Vietnam, Thailand, Malaysia, Indonesia and Singapore to China in particular, it renders a brighter future prospect for the shipping industry, despite the persistent issue of over-capacity.