KUCHING: Shin Yang Group Bhd (SYG) (formerly Shin Yang Shipping Corporation Bhd) is expected to increase its containers shipping scope with the continuous improvement in fleet efficiency, routes enhancement and plying speed of its vessels.
This scope increment will be achieved via establishing strategic alliances with business partners to provide efficient and effective port services while the partners will aim to achieve economies of scale to increase shipping service frequency routes from the group’s 16 container vessels, according to SYG group executive chairman Tan Sri Ling Chiong Ho.
Out of the 16 container vessels, two of them with carrying capacities of 800 to 1,000 twenty-foot equivalent units (TEUs) per trip are deployed on the Sarawak-Singapore route. The other container vessels serve ports between Peninsular Malaysia, Sarawak and Sabah.
The group has also converted two tug-and-barges to transport containers for shorter routes to ensure that there is no shortage of shipping space. The group leased out two container vessels for container shipment between China, Vietnam and the Philippines.
In financial year ended June 30, 2023 (FY2023), Ling said the group’s container vessels transported 196,354 TEUs lifting capacity, down from 212,500 TEUs in FY2022 .The utilisation rate of the container vessels decreased to 79 per cent from 85 per cent in 2022.
For the group’s dry bulk operations, SYG vessels transported timber products, quarry, aggregate, sand, equipment and machinery and other dry bulk plying Miri, Sibu, Kuching, Kota Kinabalu, Sandakan, Port Klang, Brunei, Singapore, Thailand and Indonesia on a regular basis.
The company said it has sufficient vessels for voyage and time charters to sustain the demand of both international and domestic charterers. The current major charterers are from oil & gas, timber downstream, oil palm industry and other resource-based industries.
The group is also actively participating in sand extraction and reclamation of land with its fleet of tugs and barges, and managing total logistic service providers.
On international shipping, Ling said the group’s fleet of five twin decker cargo vessels shipped 437,000 cubic metres of downstream timber products with freight rates of between US$42 and US$54 per cu m in FY2023, a decrease of 34.2 per cent from 664,000 cu m in FY2022, to the Far East regions.
For the returning inbound routes, these vessels were mainly on time charter for shipments of general cargo from Far East regions to the Philippines and other ASEAN countries, enroute to home region.
According to SYG, with the foreseen stable demand towards the international shipping due to supply uncertainty in terms of freight rates and utilisation, its emphasis is on time charter of vessels.
The group is also into liquid bulk sea transportation, and it has an on-going five-year contract of affreightment with Petronas Chemical Marketing (Labuan) Ltd to ship methanol products from Labuan via vessel with parcel size below 1,500 metric tonnes.
According to Ling, the shipment of liquid bulk from the tankers has shown its earnings stability.
In FY2023, the group had maintained its vessel fleet of 199 vessels with a gross tonnage (GT) of about 326,000 tonnages against 225 vessels with GT of 349,000 tonnages in FY2022.
“We had analysed that domestic and coastal shipping were the major growth contributors covering the local demand from both the infrastructure and resource-based sectors.
“As part of our strategic growth plan, we embark to leverage our expertise in warehousing and third party logistics to solidify our position as a one-stop service provider.
“We are dedicated to expand our network of warehousing deliberately, allowing us to better serve our clients and to meet the ever evolving market demand,” he added.
On the group’s shipbuilding business, Ling said it has shown signs of a stable recovery path from the operating expenditures by the oil and gas industry players, coupled with improvement in crude oil prices.
In FY2023, the group secured five new shipbuilding contracts, pushing up its current book orders to RM175.7 million.
“The order book for ship repair and docking effect maintenance has shown a gradual recovery with a few new built vessels being ordered as the industry recovers over the year.”
In FY2023, the group secured seven major ship repairs contracts, boosting the current book order to RM89.3 million. During the year under review, the group repaired 585 vessels (FY2022: 518 vessels), involving both minor and major repairs. The group managed to carry out improved vessel repair and maintenance works with its 160m and 80m long floating
docks.
On financial performance, Ling said SYG recorded a 5.2 per cent growth in revenue to RM939.6 million in FY2023 (FY2022: RM893.5 million) while its after-tax profit surged 27.8 per cent to RM182.6 million (RM142.8 million).
He attributed this achievement to a combination of factors, coupled with a high utilisation of shipping spaces for the container vessels and bulk carriers as well as the improved sales volume and high demand for transportation and logistics services.
On prospects for the new financial year, Ling said: “We continue to equip ourselves to build a greater resilience in our business portfolio. Our strength on the balanced consolidation of our business activities would continue to guide us to higher revenue earning and greater business achievements.”
He said the continuous infrastructure development, which is prioritised by the Sarawak government, creates numerous supporting spin-off shipping business activities including the requirement for shipping and third party logistics for the resource based projects.
“In the shipbuilding sector, the emphasis is on taking aggressive steps to build valued new vessels and to strengthen our floating dock facility, which would enable us to carry out improved vessel maintenance works and also effectively carry out docking essential empowering works to meet the niche requirement markets.
“The challenge for the group is to further improve its efficiency and productivity in the fleet efficiency, shipbuilding & ship repair activities and third party logistic activities. The group shall continue to work on achieving and realising its potential through the full use of its resources.
“Barring any unforeseen development, the board remains positive yet cautious that the group will continue to sustain their resilient performances in FYE2024,” added Ling.
