STX Pan Ocean, a South Korean shipping firm listed in Singapore, posted a 27 percent rise in quarterly profits thanks to strong demand for dry bulk shipments and predicted that freight rates will recover in the second half of 2005.
The company, South Korea's biggest dry bulk shipping firm, said on Monday that second-quarter net profit rose to $108.6 million from $85.6 million in the same period a year earlier, on 34 percent higher sales of $780.5 million.
STX Pan Ocean listed its shares on the Singapore stock market last month after poor demand had forced the company to slash its issue price. Investors had feared STX might suffer a fate similar to China COSCO, whose shares slipped 10 percent on their Hong Kong debut in June.
STX stock has risen 14 percent from its S$0.90 a share offer price since the July 14 flotation. The firm had to lower its maximum offer price by nearly 30 percent from the high end of S$1.27 of its original offer range for the deal to go ahead.
In a statement on Monday, STX reiterated its view that dry bulk rates would improve after hitting two-year lows in recent weeks.
Despite a recent cutback in China's imports, particularly of iron ore used in steel production, as the driving force behind the decline, "management believes there are some prospects that the BDI will improve in the third quarter of 2005," it said.
The Baltic Dry Index (BDI), which tracks bulk shipping rates, has fallen sharply from a high of more than 6,200 points in December to around 1,800 as ore imports to China have dropped due to lower steel prices.
Credit ratings agency Standard & Poor's warned in a recent note that the industry's medium-term outlook was clouded by uncertainty over the future demand-and-supply balance.
Comments
Comments are closed.