KUCHING: Harbour-Link Group Bhd expects freight rates for container liners for both domestic and Intra-Asia trade to remain stable throughout 2022.
The Bintulu-based company foresees all services provided under the group’s shipping and marine division to maintain and continue with organic growth this year.
“Container line service shall remain the key contributor to this division. We shall foresee the freight rates for both domestic and intra Asia trade remain stable throughout the year. Other shipping services within the division shall also recover due to the economic recovery,” added Harbour-Link when commenting on outlook and prospects for financial year 2022 (FY2022) in the management discussion and analysis contained in its 2021 annual report.
Quoting AlixPartners 2021 Container Shipping Outlook, Harbour-Link said the global shipping industry enjoyed a boom phase in first quarter-2021,with global container freight rate indexes topping US$5,000 per 40-foot container in February after climbing steeply and steadily since May 2020.
Thanks to the strong freight rates and better utilisation of shipping space from intra Asian trade, the shipping and marine division saw its revenue rose by seven per cent or RM24.4 million to RM396 million in FY2021 from RM371.6 million in FY2020.Group’s after-tax profit attributable to shareholders more than doubled to RM60.6 million from RM25.9 million in the previous year.
According to AlixPartners, fuel costs remained low despite strict new regulations aimed at reducing sulphur emissions as a prelude to additional measures intended to decarbonise the industry.
Harbour-Link operates a fleet of 12 container vessels with a total capacity of 6,200 TEUs.
The company describes the fleet as the ideal size that corresponds to the existing demand of its niche market within the group’s achievable high rate of utilisation.
The company is also actively involved in the sea transportation of timber products, mainly sawn timber and round logs, servicing within the Asean region, namely Vietnam, the Philippines and Thailand.
It depoys four set of tugboats and barges to service these operations
On its ship agency service, Harbour-Link said it has a well experienced team of shipping personnel with vast port operation expertise to handle all types of ships calling at every port in Malaysia, Singapore, Brunei, Hong Kong and China.
Vessels they handle are mainly container ships, bulk carriers, oil tankers, tug and barages, car carriers and offshore supply boats.
The shipping agency service provides inward and outward ship clearance, ship chandling and husbandry service, stevedorage and provision of food supplies and materials.
On ship management services, Harbour-Link said it has established a well experienced ship management team consisting of ship masters, marine engineers and superintendents to manage and monitor the daily performance of its fleet of vessels plying the scheduled routes.
These teams have managed to keep down time to the minimum, avoid cost overruns and reduce frequency of ship’s delays.
“Factors that adversely affect our shipping and marine division are the issues on the COVID-19 pandemic that may affect health and safety of our crew resulting in the disruption of our shipping schedules and operations.
“With the increase in fuel cost and stringent controls in the compliances of environmental controls on carbon emission and waste management, this will increase our operation cost. But fortunately, we have a well experienced ship management team who are able to manage, support and comply with all the statutory and regulatory requirements whilst still maintaining our service with high utilisation and cost effectiveness.
“Harbour-Link has adopted a concept of strategic alliance with partners in the ‘slot exchange’ method in order to reduce cost and overcapacity on a ‘win-win’ concept. It has proven its effectiveness and viability.” it added.
The company said it intends to acquire additional vessels and equipment when the prices are favourable.
For FY2022, Harbour-Link also foresees its integrated logistic division to deliver a positive performance .
“Manufacturing sectors have gradually resumed full production after the announcement of the National Recovery Plan. The increase of export and import products and raw materials either in container or break-bulk will normalise the haulage activities. Harbour-Link has procured more haulage equipment to cater for the increase of the cargo volume.
“Gradual containment of COVID-19 pandemic will bring the economic to recovery. Foreign and local investors are coming to invest to establish manufacturing plants. Harbour-Link shall have opportunities to participate in their project cargo logistics and haulage as well as heavy equipment rental and erection works.
“Harbour-Link is monitoring closely the surging oil prices globally as it may impacts on the profit margin,” added the company.
Harbour-Link said its engineering and construction division has recently secured a few projects in the construction and erection of petroleum products’ storage tanks and auxiliary works.
On its property development business, Harbour-Link said intends to apply to the relevant authorities for its Phase 3 Kidurong Gateway project, which will comprise of 26 semi-detached industrial buildings and eight detached lots of various sizes.
It said while market on commercial shop house is still sluggish, there is still market demand for industrial buildings.