Norway-listed Jinhui Shipping & Transportation Ltd. (JIN.OS), a ship owner, charter and investment company, Tuesday warned that it expects to record a significant decline in first quarter net profit compared to last year after experiencing weak demand and low freight rates.
- Insufficient demand of global dry seaborne activity in recent months has translated into underutilization of the global shipping capacity, as a persistent supply of new vessels enter the market.
- This is particularly severe with the larger size tonnages.
- As one of the market participants in dry bulk market, the company is exposed to the current low freight rate environment mainly due to an oversupply of tonnages, and therefore had to enter into some loss-making charter contracts in early 2012 as part of its fleet is due for contract renewal in the prevailing market conditions.
- Further details of the financial information of the company will be disclosed in its first quarter results announcement in late May 2012.
- At 0920 GMT shares traded 12% lower at NOK9.01.
-By Dominic Chopping; Dow Jones Newswires