In the second quarter of 2009, Hong Kong-based Jinhui Shipping and Transportation recorded revenue of US$91.7 million and net profit of US$27.5 million representing a decline of 32 percent and 61 percent as compared with the last corresponding quarter.
Nevertheless, the group achieved operating profit of approximately US$30 million for the quarter.
The Baltic Dry Index rebounded from fairly low of 1,574 points on April 1, 2009, to 4,291 points on June 3, and closed at 3,757 points on June 30.
Still, due to the loss of a few long term time-charter contracts in the early 2009, the group was negatively impacted by reduced profits that reflected in the decline in the average daily time charter equivalent rates (TCE) of the group's fleet.
In the first half of 2009, the company disposed of five vessels, of which two Supramaxes had been delivered to the purchasers during the second quarter, whereas one Capesize, one Panamax and one Supramax would be delivered to the purchasers in the second half of 2009.
The company received net sale proceeds of some US$19 million while a loss of US$6.8 million on the disposal of the vessels was recognised.
According to a statement issued by Jinhui, the company's strategy is to maintain a young and modern fleet. The company took delivery of several vessels during the quarter, including 'Jin Rui' (Panamax) and 'Jin Gang' (Supramax).
In terms of company outlook, Jinhui maintained that trading conditions for the remained of 2009 and 2010 would continue to be "extremely challenging".
"China has been successful in ensuring credit is allocated to economic/industrial activities by implementing large-scale infrastructure projects, as well as encouraging lending to individuals which stimulated domestic consumption and fixed asset investments in order to maintain healthy economic growth," the company statement read.
"It remains debatable as to the long term consequences of such approach, but in the meantime, a positive momentum in freight rates as well as a rebound in market value of vessels was generated which we have promptly taken advantage of to enhance our financial position. We took this cautious view and conservative steps since asset prices have already surpassed their medium term earnings capability from our perspective.
"Realistically, China alone as the only driving force of global economy or the dry seaborne trade may not be sufficient for a sustainable uptrend, especially when western economies are still struggling. The very foundation of global trade has been disrupted and the economic dynamics within as well as between countries and regions will go through radical structural changes going forward."
Jinhui said it would remain cautious with its medium term outlook and that it would monitor the dry bulk market and other key global economic indicators vary carefully.