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The global economic crisis combined with an increase in new tonnage presented the
most difficult operating environment for the shipping industry in the first quarter of 2009. In
addition, the credit issues affecting most businesses as evidenced in the first 2 months of
the year led to more severe drop in liftings in this traditionally low season. The drop in
demand coupled with the lack of confidence in the future created a serious impact on
ocean freight rates and was most apparent in the Asia to Europe trade. However, there
were positive signs from March statistics as most ports in Asia recorded a strong recovery
in liftings compared to the first 2 months of the year. With renewed confidence after the
G20 meeting and an improved tonnage deployment plan by some shipping lines, there
were some indications that the freight rates had bottomed.
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The substantial drop in the East West Trade cargo volume affected the Group¡¯s Shipper
Owned Container (SOC) liftings the most. The SOC liftings in Q109 declined by 28% yearon-
year at 262,631 TEUs. Although Asia economy was also affected by the economic
crisis, its impact was significantly lower compared to the U.S. and Europe. The Group¡¯s
Carrier Owned Container (COC) liftings reduced by 8% only, at 298,381 TEUs. Overall,
total liftings of the Group recorded a 19% decline year-on-year at 561,012 TEUs.
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With 19% reduction in liftings, total turnover for the first quarter before exchange
difference, gain on sale of assets, and reversal of allowance was down by 22% at
THB3,699 million. The decline in liftings was the main contributor to the decrease in
turnover. The freight rates for Q109 were also lower but have been alleviated by a weaker
Thai Baht when the Group¡¯s US dollar denominated revenue was translated into Thai
Baht. The Thai Baht weakened against the U.S. Dollar in Q109 by almost 10% year-onyear
and thus provided a translation gain.
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On the contrary, a weaker Thai Baht provided a translation loss to the Cost of Freight and
Operation when majority of the Group¡¯s US dollar expenses were translated to Thai Baht.
With a 19% reduction in liftings, the Cost of Freight and Operation in first quarter 2009
was THB4,028 million, only a decrease of 2% year-on-year. As mentioned, the Cost of
Freight and Operation suffered a translation loss and fixed cost such as external timecharter
hire, vessel operating cost & port charges, etc will not reduce proportionally the
drop in liftings. Otherwise, other cost items were in line with the reduction in liftings.
The Company having embarked on a series of cost reduction initiatives will realize most of
the savings from Q209 onwards.
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In Q408 last year, the company provided an unrealized loss on derivative amounted to
THB1,008 million. After taken into account the actual realized loss in Q109 and having
provided for the unrealized portion as at the quarter ended, the company recorded a net
gain on derivative differences amounted to THB197.8 million in Q109.
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In first quarter last year, the Group disposed two old vessels with a disposal gain of
THB146.9 million, while there was no disposal activity in this quarter. In Q109, as Thai
Baht weakened against the U.S. dollar, the Group recorded a Loss on Exchange of
THB164.7 million against a Gain on Exchange of THB191.9 million in the same quarter
last year.
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With reduction in liftings, lower freight rate, no disposal activities and an unfavorable
exchange rate environment this year, the Group recorded a Net Loss attributable to equity
holders at THB711.3 million for Q109 versus a Net Profit of THB524.6 million last year.
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Regional Container Lines PLC
21 May 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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