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Straits Times
19-05-2025
- Business
- Straits Times
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.
Business Times
16-05-2025
- Business
- Business Times
Pacific International Lines' FY2024 net profit quadruples to US$1.3 billion
[SINGAPORE] Pacific International Lines (PIL) on Friday (May 16) posted a net profit of US$1.3 billion for the FY2024 ended Dec 31, 2024, more than quadrupling from US$306.9 million the previous year. This was attributed to a significant growth in its operating revenue as well as effective cost management. Earnings before interest, taxes, depreciation and amortisation jumped to US$1.7 billion, from US$566.2 million. Meanwhile, revenue grew 49 per cent year on year to US$4.3 billion. This was led by its container shipping business, which saw revenue increase US$1.3 billion to US$3.8 billion on the back of stronger freight rates and high asset utilisations. A volume growth of 9.6 per cent in a highly disrupted market environment also helped to boost revenue. For its container manufacturing business, revenue rose US$163.4 million to US$541.1 million. Gains were primarily driven by a surge in demand for dry freight containers due to disruptions from the Red Sea crisis. 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 Restocking activities in the US prior to the country's 2024 presidential election and the delivery of new container vessels to shipping lines during the year also increased demand for containers. PIL reported a healthy cash balance of US$2.3 billion as at Dec 31, 2024. To support its goal of operating a more modern, fuel-efficient and environmentally sustainable fleet, the company said it has ordered 18 new liquefied natural gas dual-fuel vessels, of which six have been delivered. These are in addition to PIL's current fleet of 89 owned vessels and 12 chartered-in vessels. Lars Kastrup, CEO of PIL, said: 'The additional capacity brought on by newbuild vessels coming on stream in 2025 is expected to outpace the market demand for goods, but continued port congestions may absorb some of the capacity growth.' With the year ahead expected to be filled with uncertainty and heightened challenges, Kastrup said that developments in the volatile market conditions will be monitored closely, and PIL will remain flexible to adapt to changes. 'Our strong cash position is bolstering our financial stability and resilience, and enabling us to continue to seek business growth,' he added. The company will continue to double down on strategies and initiatives which have worked well for them. This includes the launch of the PIL Centre for Maritime Efficiency and a memorandum of understanding (MOU) with the Centre of Excellence in Maritime Safety. The first was created to improve the energy efficiency of its ships and fleet, while the MOU enhances the competency of seafarers in safe navigation through technical and soft-skills training.
