KUALA LUMPUR (Nov 29): Shipping services provider Shin Yang Group Bhd reported a 48.16% drop in net profit to RM26.05 million for its first quarter ended Sept 30, 2023 (1QFY2024), from RM50.30 million in the same quarter last year, largely due to a decline in freight margin for its bulk carriers and lower shipment of containers in its shipping segment.

Earnings per share thus fell to 2.30 sen from 4.38 sen, its filing to Bursa Malaysia showed. Quarterly revenue dropped 10.1% to RM222.41 million from RM247.30 million, with its shipping revenue dropping to RM167.4 million from RM220 million.

The drop in shipping topline was partly mitigated by higher shipbuilding, repair and fabrication revenue, which rose to RM33.72 million from RM7.74 million, and higher revenue from its service providers business, at RM17.1 million versus RM15.57 million previously.

The 1QFY2024 profit is also lower than the RM52.13 million it logged in the immediate preceding quarter (4QFY2023), as revenue slipped 2.28% from RM227.61 million.

The group said its performance is largely dependent on the volatility of fuel prices, standard of skills and experiences of ship crews, and domestic and regional demand for transportation of dry bulk and general cargoes. The ringgit's movement and the world economic situation may also significantly affect its business operations and margins.

Prospects for the shipping industry remain challenging, it said, with the Baltic Dry Index, which tracks the cost of shipping bulk dry goods, declining, while crude oil prices stabilised recently.

“The group is prepared to weather this challenge with selective market driven routes based on fleet load utilisation. The group is confident in the stability of the domestic, bulk carrier and container shipping operations given the stable lifting volume and market demands. The continuous improvement in operational costs management, fleet efficiency and route enhancement would be an important priority in the next few quarters," it added.

Shin Yang shares closed 1.5 sen or 2.33% lower to 63 sen on Thursday, giving the group a market capitalisation of RM756 million.