Singamas Container (716) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 rose 28.2% year-over-year to US$242.9 million, driven by strong demand for dry freight containers due to the Red Sea crisis, global trade growth, and increased restocking in the US, Africa, and Latin America.

• Net profit attributable to owners increased 76% year-over-year to US$17.2 million, with basic earnings per share at US0.72 cent, up from US0.41 cent in 1H2023.

• Manufacturing and leasing segments contributed 94.2% of total revenue, with segment profit before tax at US$18.2 million.

• Interim dividend of HK3 cents per share declared, up from HK1 cent in the prior year, with a payout ratio of 53%.

• Core products include dry freight, ISO specialized, and innovative customized containers, with a focus on Energy Storage System (ESS) containers.

Financial highlights

• Gross profit increased to US$36.7 million from US$26.4 million year-over-year, with improved gross margin on dry freight containers.

• Net asset value per share was US23.32 cents as of 30 June 2024.

• Profit before taxation was US$22.5 million, up from US$15.3 million in the prior year period.

• Interest income from bank deposits was US$6.7 million.

• Cash and cash equivalents stood at US$92.7 million as of 30 June 2024.

Outlook and guidance

• Demand for dry freight containers is expected to remain strong in the second half of 2024 due to ongoing Red Sea disruptions and US retail restocking, though the fourth quarter outlook is less certain due to seasonality and potential geopolitical impacts.

• Customised containers, especially for energy storage and digital/data applications, are anticipated to see further growth.

• The company is deploying contingency plans to secure 4Q2024 orders, reduce costs, and manage risks amid market volatility.

• Capital expenditures will focus on safety, environmental protection, high-growth customized container projects, and automation.

• Long-term lease rates for containers are expected to rise in 2024, with initial cash investment returns for newbuild containers projected in the 9.8–10.7% range through 2028.