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The global financial crisis in October had led to severe market correction and substantial
decline in economic activities. As banks were reluctant to lend, many shippers failed to
secure letters of credit to continue their production and hence hampered the world trade.
Although the issue on letters of credit seemed to be resolved, and there was significant
sign that cargo volume had picked up again after the Chinese New Year, the Group¡¯s
liftings in Q408 and in particular, January 2009 were badly affected.
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The Group¡¯s Shipper Owned Container (SOC) liftings came under pressure as it was
largely linked to world trade. In Q408, SOC liftings dipped 4% at 342,848 TEUs. The
Group¡¯s Carrier Owned Container (COC) liftings were able to sustain and recorded a 1%
growth in Q408 at 341,383 TEUs. Overall, total liftings slipped 2% year-on-year in Q408 at
684,231 TEUs. The Group expanded its capacity in the first half of the year. With a decline
in liftings, the fleet utilization was down by 20% from 117% in Q407 to 97% in Q408. As
the group captured higher growth in the first nine months, SOC liftings were up by 7% at
1,514,837 TEUs and COC liftings rose 4% at 1,385,705 TEUs for the full year of 2008.
The total liftings increased by 6% at 2,900,542 TEUs with overall utilization dropped 9%
to 108% in 2008.
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The total turnover for the fourth quarter before exchange difference and gain on sale of
assets was reduced by 5% at THB4,731 million. The decreasing freight rate and reduction
in liftings were partially offset by the translation gain as THB weakened in Q408. Although
overall liftings improved in 2008, total turnover before exchange difference and gain on
sale of assets was down by 1% at THB19,767 million for the full year 2008 due to
unfavourable freight market.
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Cost of Freight and Operation during this period was heavily influenced by the bunker
price movement. Bunker price adjusted downward sharply since mid October of 2008.
However, the Group was not able to benefit fully from the price reduction, as bunker
inventory carried over at a much higher price in September, had an adverse impact to the
Cost of Freight and Operation in Q408.
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In addition, the Group also entered into bunker swap contracts to protect further price hike
risk in Q308 and to cover mainly the exposure in Q408 to Q109. The marked decline in
bunker price caused a bunker hedging loss of THB467.5 million in Q408. As bunker swap
contracts were carried forward to 2009, an allowance for unrealised loss from the changes
in the fair value amounted to THB1,008 million was recorded as expenses in the Q408
financials.
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The 2% reduction in liftings and a translation gain from the Group¡¯s US dollar expenses
when translated to Thai Baht, were unable to offset the bunker impact, resulting in an
increase in the Cost of Freight and Operation by 15% at THB4,919 million in fourth quarter
2008. For the full year 2008, the Cost of Freight and Operation grew by 15% at
THB18,780 million with the increase mainly contributed by bunker price volatility in 2008.
With deteriorating world trade, property market in the region had also been affected and
was generally lower than last year. Contrary to an impairment write-back of the Group¡¯s
Singapore and Hong Kong office properties of THB1,531.8 million in Q407, the Group
provided an impairment charge of THB182.3 million to reflect the change of its fair value in
2008 in Q408.
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In December 2008, the Group had disposed off a 1985 built vessel and recorded a gain on
disposal amounted to THB108.2 million. For the year 2008, the Group had in total
disposed five vessels against one in 2007, and consequently booked a Gain on Disposal
of vessels which amounted to THB943.3 million for the full year 2008.
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As improvement in volume together with higher gain from disposal of vessels were offset
by stronger Thai Baht, lower freight rate & lower utilization, unrealised loss from the
changes of fair value in the bunker swap contracts and the impairment loss provision, the
Group recorded a net loss of THB1,609 million in Q408 against a net profit of THB1,938
million for the same quarter last year. With the unprecedented hike in bunker price, lower
utilization, realized bunker hedging loss, allowance for unrealized loss from the changes
of fair value in the bunker swap contracts and the impairment loss provision, the Group
recorded a net lost of THB837 million in 2008 against last year¡¯s net profit of THB3,816
million.
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In fourth quarter of this year, the Group recorded a Gain on Exchange of THB37.5 million
as compared to THB105.8 million in the same quarter last year. As for the year 2008, the
Group recorded an Exchange Gain amounted to THB111.7 million vis-a-vis THB249.3
million in 2007.
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As at 31st December, 2008, the Group held cash and cash equivalent amounted to
THB3,437 million and which was 23% up comparing to 31st December, 2007.
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Regional Container Lines PLC
27 Feb 2009
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~~o~~o~~
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About RCL
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Founded in 1979, RCL is a Thai based container shipping line which was public listed on the Thai Stock Exchange since 1988. Its core business is in the carriage of Shipper owned containers (or SOC) and its own Carrier owned containers (or COC) within a service network that is fully Asia centric. RCL currently owns and operates a fleet of more than 40 vessels with sizes ranging between 500 TEUs to 3000 TEUs, with a fleet of 80,000 TEUs to support its own COC carriage as well. It also operates a network of 54 offices made up of both owned and agency offices to support its service structure. RCL is today recognized as amongst the leading SOC and Intra Asia COC operators by both peers and customers alike.
For media enquiries, please contact Michelle Ng at ph: (65)62292087 mail: michelle@rclgroup.com
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