Samudera Shipping Line said that net profit for H1 2020 nearly tripled year-on-year to US$7.31 million, even as container volumes fell nearly 11%.
The Indonesian ship operator is also active in tankers and dry bulk, but container transportation contributes 95% of its revenue.
In the first half of this year revenue totalled US$174.83 million, which was 5.5% lower than in H1 2019.
Demand fell due to the Covid-19 pandemic. As a result, Samudera’s container volumes fell 10.5% to 570,600TEU, compared with 637,600TEU in H1 2019. Revenue from the container shipping segment fell 4.3% to US$166.3 million in H1 2020, from US$173.8 million in H1 2019.
Samudera, which is listed on the Singapore Exchange, said that in response to weakened demand amid Covid-19, it reduced its fleet and cut unprofitable routes.
Scaling back on certain routes resulted in a corresponding decline in overall operating costs, resulting in the significant increase in profit.
Samudera also benefited from the Singapore government’s subsidy of US$523,000, as part of the city-state’s Job Support Scheme to discourage companies from retrenching employees amid the Covid-19 pandemic.
Samudera believes that the rest of 2020 will be challenging.
The company said, “The Covid-19 pandemic, along with geopolitical trade conflicts, has aggravated the difficult operating conditions of the container shipping industry.” The company added, “This has lowered container demand and resulted in intensifying competition among ship operators.”
In addition, Samudera said bunker price volatility, the cost of complying with IMO2020 regulations as well as the implementation of safe-working measures to prevent the spread of Covid-19 throughout the organisation, are all raising operating costs.