Sinotrans Revenues, Profits Fall with Sluggish Market

The company's bunker costs rose 43 percent

China's Sinotrans Shipping Limited [0598.HK] (Sinotrans) reports that its revenues fell 21.1 percent to $222.2 million year over year in 2012, and its profit fell 78.1 percent to $20.1 million as recovery of the international shipping market continued to drag.

The company's bunker costs rose 43 percent to $31.9 million, compared with $22.3 million the previous year, due to rising bunker prices and increased consumption resulting from growth in voyage charter shipping.

Sinotrans said the European debt crisis and slow growth in developed countries like the U.S. and Japan, and slowing growth of emerging economies contributed to a difficult market.

"Our Group managed to cope with challenges and alleviate the adverse impacts of the market downturn on us by leveraging on our -antage, insisting on our sound and robust management and enhancing our risk management," the company said.

Sinotrans predicts a continued "stagnant recovery" in developed countries along with a possible slowdown in the growth of emerging economies including China.

"Thus the global economy will remain challenging," it said.

However Sinotrans predicts the global seaborne trade demand will maintain a moderate growth as different countries carry out new economic stimulus policies.

Other companies have also reported struggling with the dry bulk market over the last year, including Sanko Steamship Co. Ltd., which filed for bankruptcy last year, and Cargill Inc., which said in October that it would slow vessel speeds to 9 knots to save money on fuel and predicted "a lot more pain" in the market.