19-05-2025
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.
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