Singapore shipping line PIL quadruples profits for 2024, but warns 2025 will be challenging
PIL chief executive Lars Kastrup noted that the liner's operational strength, strong cash position and efficient cost-cutting enabled it to perform well. PHOTO: PACIFIC INTERNATIONAL LINES (PIL)
Singapore shipping line PIL quadruples profits for 2024, but warns 2025 will be challenging
SINGAPORE - Pacific International Lines (PIL) has more than quadrupled its earnings for 2024, thanks to a surge in demand for container shipping and higher freight rates, but warned that 2025 will be a tougher year with more disruptions.
The Singapore shipping line on May 16 announced 2024 earnings amounting to US$1.34 billion (S$1.73 billion), which is up by more than 330 per cent compared with 2023.
Revenue surged 49 per cent year on year to US$4.31 billion, largely driven by growth in its container shipping segment, which enjoyed higher freight rates and a 9.6 per cent increase in the number of containers moved on its ships.
Container shipping accounted for more than 87 per cent of the liner's revenue in 2024. The liner's key routes are Africa, South America and the Middle East and intra-Asia.
PIL's container manufacturing business also grew, boosted by increased demand for containers amid Red Sea shipping disruptions and pre-election restocking activity in the US.
The home-grown liner has been expanding its revenues and investing in its fleet of vessels since receiving a US$600 million lifeline from Temasek's wholly owned Heliconia Capital Management in 2021 to help it stave off bankruptcy. The bailout involved Heliconia taking a majority stake in the liner.
As at end-2024, PIL reported healthy cash reserves of US$2.33 billion and a fleet of 101 ships able to transport a total of 442,000 twenty-foot containers. The fleet comprises 89 owned and 12 chartered ships.
In 2024, the liner rolled out a US$2 billion plan to replace part of its fleet with dual-fuel container ships that can run on both liquefied natural gas and conventional marine fuel as pressure widens for shipping to comply with the industry's net-zero targets.
It has received six newbuilds since October 2024, including two that have the capacity to move 14,000 containers, and has another 12 newbuild vessels on order.
PIL chief executive Lars Kastrup noted that the liner's operational strength, strong cash position and efficient cost-cutting enabled it to perform well despite a challenging environment for shipping.
In 2024, the industry faced major disruptions caused by disruptions in the Red Sea. These include congestion in key ports due to scrambled shipping schedules and more vessels being deployed to longer routes to ensure goods are delivered on time.
More shippers also accelerated shipments in anticipation of potential disruptions, including dockworker strikes at major US ports and new tariffs on US-bound goods. This surge in early deliveries contributed to supply chain bottlenecks and tightened shipping capacity.
These challenges are expected to intensify in 2025, at a time when many terminals are not able to develop fast enough to keep up with the volume growth and larger-sized container vessels that are being introduced into existing and emerging markets, Mr Kastrup said.
'The year ahead is expected to be filled with uncertainty and heightened challenges. The additional capacity brought on by newbuild vessels coming on stream in 2025 is expected to outpace the market demand for goods, although continued port congestions may absorb some of the capacity growth,' he said.
He added that the liner's strong cash position will enable it to continue to seek business growth.
Join ST's Telegram channel and get the latest breaking news delivered to you.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
42 minutes ago
- Straits Times
Haidilao operator Super Hi swings to $15.3 million Q1 profit on forex gains, more delivery business
Super Hi did not disclose the performance of its Singapore operations, but noted that average daily revenue per restaurant in South-east Asia fell 3.2 per cent to US$15,300. PHOTO: AFP Haidilao operator Super Hi swings to $15.3 million Q1 profit on forex gains, more delivery business SINGAPORE - Super Hi International, the operator of Haidilao's international business, posted a net profit of US$11.9 million (s$15.3 million) for the first quarter ended March 31, reversing a net loss of US$4.5 million in the same period the year before. The turnaround was mainly driven by a US$20.4 million reduction in net foreign exchange losses due to currency fluctuations – particularly, the revaluation of local currencies against the US dollar – said Super Hi. Earnings per share for the company – which is listed on both the Nasdaq and Stock Exchange of Hong Kong – stood at US$0.02, up from a loss of US$0.01 a year earlier. Revenue rose 5.4 per cent year on year to US$197.8 million, from US$187.6 million. This was led by a 37.9 per cent increase in revenue from the delivery business to US$4 million, from US$2.9 million. Super Hi attributed the jump in delivery revenue to sustained investment and marketing efforts in the delivery business, as well as the expansion of its delivery network alongside growing restaurant coverage. Revenue from restaurant operations grew 4.5 per cent to US$188.4 million, while that from its other business, including retail food products, rose 22.7 per cent to US$5.4 million. Super Hi did not disclose the performance of its Singapore operations, but noted that average daily revenue per restaurant in South-east Asia fell 3.2 per cent to US$15,300. In contrast, average daily revenue rose 19.9 per cent in East Asia to US$19,300, and 3.3 per cent in North America to US$22,200. Its income from operation fell 33.9 per cent year on year to US$8.2 million, while the income from operation margin narrowed to 4.1 per cent from 6.6 per cent. The decline was mainly due to higher spending on customer and employee benefit initiatives; increased outsourcing and maintenance costs from network expansion; and higher short-term lease payments. Total guest visits rose 6.8 per cent year on year to 7.8 million. The group also opened four new Haidilao outlets and closed three underperforming ones during the quarter. As at end-March, it operated 123 restaurants outside China, up 3 per cent from 119 a year earlier, with South-east Asia remaining its largest market (73 outlets). Chief executive and executive director Yang Lijuan said Super Hi focused on refining operational strategies during Q1, to boost customer value and loyalty through pricing adjustments, improved portion value and more diverse dining formats. Mr Yang added that the group will continue advancing its 'Pomegranate Plan', launched in 2024 to drive product diversification. The initiative aims to grow new dining formats such as fast food and halal hotpot, supported by specialised teams in operations, product development and marketing. THE BUSINESS TIMES Check out ST's Food Guide for the latest foodie recommendations in Singapore.
Business Times
2 hours ago
- Business Times
Europe: Shares slip as markets unfazed by US-China deal
EUROPEAN shares saw their early gains evaporate, closing in the red on Wednesday, as the much-anticipated US-China trade talks offered scant details, despite promises of high-level agreements. The pan-European Stoxx 600 had risen following a cooler-than-expected US inflation report that eased tariff-related concerns and bolstered hopes for the Federal Reserve to cut rates. However, the index ultimately closed 0.27 per cent lower at 551.64 points- its third straight day of losses. Meanwhile, a day after officials from Washington and Beijing agreed on a framework to restore their trade truce, President Donald Trump said the US-China deal was done, with Beijing set to supply magnets and rare earth minerals. According to a White House official, the agreement with China allows the US to charge a 55 per cent tariff on imported Chinese goods, including a 10 per cent baseline 'reciprocal' tariff, a 20 per cent tariff for fentanyl trafficking and a 25 per cent tariff reflecting pre-existing tariffs. China will charge a 10 per cent tariff on US imports, the official said. Investors in Europe responded cautiously, while the talks ended in a truce, analysts said investors had hoped for more substantial progress. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'Markets had a lot of hopes that folks in London were going to see some major breakthrough and essentially all it's done is reiterate what they had a month ago,' Daniela Hathorn, senior market analyst at The benchmark index, however, was still 2 per cent shy of its February all-time high. Europe, once a prime beneficiary of the rotation out of US assets, now finds itself gripped by a pervasive caution due to Trump's mercurial tariff policies. The biggest catalysts for European markets are increased defence spending and the European Central Bank cutting borrowing costs. However, ECB officials have indicated that the easing cycle will come to an end. Traders are pricing in just one more rate cut by the tail-end of this year. 'Investors piled into European markets and have taken advantage of that cheap equity market, it's now a case of what else is going to continue to power this drive,' Hathorn added. On the markets side, the utilities sector, often traded as a bond-proxy, emerged as the day's top sectoral performer. Conversely, retailers led the decline, sinking 1.7 per cent due to a 4.4 per cent drop in Inditex after the Zara owner missed first-quarter sales forecasts. British homebuilders Bellway and Vistry saw their shares rise following finance minister Rachel Reeves' announcement of a £39 billion (S$67.5 billion) decade-long affordable housing programme that will nearly double annual spending on low-cost homes. London's FTSE 100 was up 0.1 per cent while mid-cap FTSE 250 rose 0.2 per cent. REUTERS
Straits Times
2 hours ago
- Straits Times
After 3 up days, S&P 500 falls on trade announcement
Traders working on the floor of the New York Stock Exchange, in New York City, on June 11. PHOTO: REUTERS After 3 up days, S&P 500 falls on trade announcement NEW YORK - Wall Street stocks finished lower June 11 despite positive movement in the US-China trade conflict and a benign US inflation report. Following two days of talks in London, top US and Chinese negotiators announced a 'framework' agreement late on June 10 that included Chinese concessions on rare earth materials and Washington allowing Chinese students to study at US universities. But stocks fell in what described as a 'sell the news' response to a breakthrough that had been largely priced in. The broad-based S&P 500, which rose the last three days, finished down 0.3 per cent at 6,022.24. The Dow Jones Industrial Average was flat at 42,865.77, while the tech-rich Nasdaq Composite Index dropped 0.5 per cent to 19,615.88. Treasury Secretary Scott Bessent warned a broader deal with China would take a 'longer process,' saying it was possible to rebalance economic ties with Beijing only if Beijing proved a 'reliable partner in trade negotiations.' And for partners 'negotiating in good faith,' Mr Bessent told a congressional committee, there could be an extended pause before higher threatened tariff rates take effect in July. Besides trade, markets digested key inflation data. Consumer prices rose 2.4 per cent compared with a year ago, up from a 2.3 per cent reading for the prior month, a modest uptick that analysts said still did not fully reflect the impact from Mr Trump's tariffs. Mr Sam Stovall, of CFRA Research, described the June 11 session as a 'rollercoaster,' positing that the negative finale may reflect unease at reports Mr Trump could appoint a 'shadow' Federal Reserve chairman to try to influence monetary policy without firing Fed chairman Jerome Powell. Mr Stovall also highlighted the possibility that 'the market is overbought and due for some sort of digestion of gains.' Among those falling, large tech names including Amazon, Facebook parent Meta and Apple lost more than 1 per cent. AFP Join ST's Telegram channel and get the latest breaking news delivered to you.
