KUCHING: Shin Yang Shipping Corporation Bhd (Syscorp) has boosted the transportation capacity of its containerised shipping with the acquisition of two container vessels.
The two vessels, which were bought in the financial year ended June 30, 2019 (FY2019) has carrying capacity of 800 to 1,000 twenty-foot equivalent units (TEU) per trip.
This is to strengthen the container shipping activities, said the Miri-based shipping, ship building and repair company. Currently, the group operates a fleet of 14 container vessels.
“The group’s lifting capacity of containers has improved by 31.7 percent in TEU for the year,” Syscorp said in its 2019 annual report.
The utilisation rate of the container vessels rose to 88 percent in FY2019 from 83 percent in FY2018.
Syscorp said the group is expected to stabilise its container shipping by establishing strategic alliance with business partners to provide efficient and effective port services while the partners will aim to achieve economies of scale to increase shipping service frequency routes coverage between East and West Malaysia.
During the year under review, Syscorp maintained a fleet of 250 vessels with gross revenue tonnage of about 393,100 tonnage as compared to 268 vessels with 380,299 tonnage in FY2018.
On international shipping services, the company said with the foreseen unstable demand in view of prolong uncertainty, its emphasis is on time charter of vessels. The group has reduced its shipping activities in the Middle East region.
Syscorp said in FY2019, the group has renewed an one-plus-one-year contract of affreightment to ship methanol products from Labuan via vessel with parcel size below 1,500 tonnes with Petronas Chemical Marketing (Labuan) Ltd.
“The demand for crude palm oil (CPO) shipment for East Asia region is stable and seasonal in demand which has the improved freight rate of US$17-US$33 per metric ton.
“The (group’s) CPO cargo vessel was also constantly time charter to shipping company with a fixed time charter rate,” it added.
In FY2019, the utilisation rate of the chemical tankers in liquid bulk shipping jumped to 96 percent from 85 percent in FY2018.
Besides container and liquid bulk shipping, the group is also involved in dry bulk shipping service.
The group’s eight cargo vessels shipped some 358,000 cubic metres of timber products to the far east region in FY2019. The utilisation rate of these vessels was down to 75 percent from 87 percent
year-on-year.
On its shipbuilding operation, Syscorp said it built and delivered four vessels in FY2019.
“Weaker sentiments towards shipbuilding from the oil and gas sector was due to minimisation of their capital expenditures by the oil and gas industry players.
“In the coming year, the group foresees growing shipbuilding orders from Far East and Middle East region and domestic demand.”
According to Syscorp, its ship repair and fabrication segment operated satisfactorily in the 12 months under review, with the repair of 753 units of major and minor vessels, an increase from 733 vessels in FY2018.
“With the strengthening of 169 metres in length and another unit with 80 metres in length, floating docks would enable us to carry out improved vessel maintenance works and also effectively carry out docking essential
defect works,” it added.
On prospects, Syscorp foresees the price of crude oil remaining stable, which in turn, will contribute to its anticipated stable bunker fuel costs to its shipping operation and shipbuilding orders.
“The continuous infrastructure development in neighbouring countries brings a lot of supporting internal spin-off shipping business activities.
“Furthermore, with our two additional container vessels, renewal for contract for affreightment to ship methanol products from Labuan and time charter of CPO cargo vessels and international shipping, this will lead to a balanced consolidation of our shipping business activities that would continue to guide us to revenue earning and business achievements,” said the company.
Chairman Tan Sri Ling Chiong Ho said Syscorp delivered a maintainable performance in FY2019 by registering group gross revenue of RM645.2 million, an increase of 4.2 percent over FY2018.
He attributed the increase mainly to a 6.8 percent jump in revenue generated from the shipping segments while the shipbuilding segment’s revenue rose to RM59.6 million from RM35.3 million or an increase of 68.9 percent year-on-year.
However, the group suffered net loss of RM89.2 million in FY2019 due mainly to the impairment loss on other receivables of RM53.1 million and the realised losses margin on production overheads of new shipbuilding works in progress during construction from shipbuilding operation segment.
Ling said currently, there are 12 vessels with contract sum of RM134 million under construction at the company yards for scheduled completion within the next two years.
