Jinhui Shipping and Transportation Limited (JIN) Earnings Call Transcript & Summary

Hello, everyone. I hope you can hear me. Welcome to Jinhui Shipping and Transportation Limited Q1 2025 Results Presentation. It's now 10:00, 10:01 I shall begin. Sorry, there's still a few people entering. Okay. I believe you've all had a look at our results announcement. Just to give you the highlights. Q1 2025, we recorded a revenue of USD 39 million for the quarter. Earnings before interest, tax, depreciation and amortization, USD 35 million. Net profit for the quarter, USD 17 million. Basic earnings per share, USD 0.156. Our balance sheet remains at a very healthy level, gearing ratio 16%. Comparing quarter-to-quarter, our revenue has gone up 41%. Net profit has gone up 6x. The average TCE of our fleet has gone up 8.3x (sic) [ 8.3% ]. Shipping-related expenses increased to $21.6 million, mainly attributable to the rise in higher payments for our chartered-in vessels. Higher payment of $4.5 million on short-term leases was incurred during the quarter. The rise in shipping-related expenses was further attributed to the expansion of the group's fleet to 26 vessels as of March 31, 2025. Daily running costs of owned vessels slightly increased from Q1 2024 of USD 4,830 per day to Q1 2025 of USD 5,375 due to the expansion of fleet size as certain initial costs, especially spare parts and consumable source were incurred at the time of delivery for newly delivered vessels. Net gain on financial assets at fair value through profit or loss of USD 1.6 million. A settlement income of USD 20.2 million was received from the legal proceedings with Parakou Shipping Pte Limited in relation to the nonperformance of a charterparty. This is related to the ongoing saga that has been going on for years. We're happy to let you all know that this has come to a final conclusion. CapEx of USD 25.9 million was incurred for the current quarter, mainly for vessel delivered in January 2025 and installment paid for newbuildings. In terms of the financing, during the quarter, a drawdown of USD 15 million upon the delivery of the vessel, and we repay $2.3 million in bank borrowings. As at 31st of March 2025, secured bank loans amounted to USD 111 million with current portion and noncurrent portion of USD 10 million and USD 101 million. I think this slide is fairly self-explanatory, so I shall not go through in detail. As of Q1 2025, our total assets has gone up to USD 572.7 million. Total equity, USD 388.68 million. Secured bank loans, $110.7 million, round up to $111 million. Current ratio 1.43:1. Gearing -- net gearing 16%. Available liquidity, USD 48.6 million and a return on equity of 4.49%. In terms of our fleet development, we took delivery of a vessel with a deadweight 61,441 metric tonnes in January 2025. As at March -- end March 2025, the group was operating 26 owned vessels and 8 chartered-in vessels with a total capacity of deadweight 2.5 million metric tonnes. In fact, as of today, we have a further movement. We actually sold a ship in March and which was delivered to the buyers in May. So as of today, we have a total of 25 owned vessels and 7 chartered-in. So here, in May 2025, the group entered into agreement to dispose Supramax built in year 2008 with deadweight 56,952 metric tonnes at a consideration of $10.2 million. There will be another one. The vessel will be delivered to the purchaser in Q3 2025. Hold on a second -- sorry, here -- so on this slide, it's just showing the development of our fleet. As of May, as of today, we have 25 owned vessels and 7 chartered-in vessels. Here's the list of our owned vessels. The average age of our fleet is 14.32 years. As you can see from our recent actions, sales, purchases, we are looking for opportunities to refresh our own tonnages. And we will continue to do so should opportunities arise. Here is the detail of our chartered-in vessels. We have 1 long-term chartered in Capesize, 2 long-term chartered-in Panamax, 2 long-term chartered-in Ultramax and 2 short-term chartered in Ultramax. So in total, we have 5 long-term chartered-in and 2 short-term chartered, total of 7. The details of our long-term chart are listed on the slide. I think our -- we have tried to stretch our maturity profile to make it as healthy as possible. As of end of March 2025, our total debt is $111 million. 9% will be repayable within 1 year, another 9% will be repayable within 2 years. 82% of that -- of the total debt will be repayable 3 years and beyond. For Q1 2025, our cargo mix hasn't changed so much. 52% of our cargo are minerals, 9% steel product, 8% coal, 8% cement, 7% agricultural products, 6% fertilizers, 10% other various cargoes. As our fleet expands, you can see that the carrying -- the amount that we carry in terms of million of tonnes has risen. On a quarter-to-quarter basis, we -- for Q1 2025, we have recorded 3.31 million tonnes versus Q1 2024, 2.61 million tonnes, a good -- a significant proportion of increase. In terms of distribution of cargo, 35% of our cargo are loaded in Chinese ports, 20% in Asian ports, excluding China, 27% are loaded in Africa -- African ports, 10% in South America, 5% in North America and 3% in Australia. This percentage is in terms of our revenue, not tonnes. In terms of discharging, 38% of the cargo in revenue terms are discharged in China, Chinese ports, 26% at African ports, 25% Asia, excluding China, 5% South American ports, 3% North American ports and 3% Australian ports. In terms of the time charter equivalent, as of Q1 2025, our Capesize TCE $22,920, is a slight decrease from the full year 2024 figure of $24,298. Panamax fleet, USD 12,822 per day. It's a drop from -- relative to Q1 2024 as well as the full year 2024 figure. For the Ultramax/Supramax fleet, $12,192, again, is a slight drop from Q1 2024 as well as the full year 2024 figures. Average $13,229, which represents a slight improvement from the Q1 quarter-on-quarter, but still lagging behind the full year 2024 figures. I think all of you would have noticed that not just in shipping, but in all many other different sectors and business, 2025 has been a year filled with uncertainty. On the daily vessel running costs of owned vessels, I think I've already explained at the beginning of the presentation, there's a slight increase as of Q1 2025 relative to Q1 2024 because we have a number of new vessels coming in. And when new vessels come in, the spare parts, initial cost, they get booked in. This will bump up the daily vessel running cost. As the ship operate, this number will decline to a normalized figure. 2025 is a field of uncertainty. We have -- the geopolitical situation remains to be fluid, field of uncertainty. We have the U.S. initiated tariffs, which frankly, has introduced a lot of potential volatility going forward. For example, going forward in terms of, especially related to shipping, port charges out of the U.S. ports, how it's going to be implemented remains a big question mark. Another initiative or potential policy that is going to be affected is how the U.S. ports will treat Chinese-built ships. That will be another uncertainty. On the positive side, we see that the supply of new vessels remains in check. This is especially the case when the U.S. has announced the potential of additional charges or penalties that will be charged on Chinese-built vessels. I just read from another Chinese shipyard announced information that their order book has dropped drastically in the first quarter of 2025. Having said that, these, frankly, are beyond the control of a company like ourselves. So for us, we will remain to be prudent in terms of our balance sheet management. We will try to continue to look for opportunities to maintain a young fleet. At any point in time, we will try to, of course, maximize our revenue as well as balancing any opportunities to lock in earnings visibility, i.e., longer-term charters, charter out to lock in our revenue. I think in this environment, it's very, very difficult, close to impossible, to tell us what exactly are our plans going forward. We will -- we have to react fairly with flexibility in the current very volatile and uncertain environment. If you have any questions, I'll welcome any questions from you guys, please.

Okay. In terms of the lump sum compensation, $20 million, I think we will just be putting this aside for now and look for opportunities to renew our vessels. Our focus remains -- our expertise, put it this way, remains in the Ultramax segment. I think we had questions before why we decided to come with a Capesize, [ Panamax ], et cetera. We have to be in those sectors to fill those markets, but our strength, our core focus remains in the Ultramax sector. In terms of the share price, I'm afraid that we just try to do as good a job as we can in terms of our operations and let the market decide on the share price. Well, I hear you about your idea of distributing settlement through dividends or share buybacks. I'll reflect this to the Board of Directors. In terms of outlook of Capesize, Panamax and Supramax, I would say that we remain to have the view that the Ultramax is, again, the sector that we know best, and I think is the most defensive. Is it realistic to assume Supramax rates will remain stable at $12,000 per day? To be honest, I do not have a crystal ball and I can't answer you that. I very much wish that it will stable around that level, but we're in shipping. Volatility is the name of the game. I don't -- I can't answer you in terms of the number of sales or number of acquisition per quarter. As I said, repeatedly said, shipping is a very, very volatile industry. It's not something that we can plan. We have to react to the market condition and the price that we can buy or the price that we can sell. It will be very irresponsible for me or for the company to tell you this is what we're going to do per quarter unless we have signed some contracts to do so. Right now, we have no commitment on any sale or purchase at this point in time. So I cannot answer. Our quality of Japanese ships yards, Chinese yards. I think historically, I have to confess that the Japanese yards have been favored by many charterers. But as time evolves, many Chinese yards -- the good Chinese yards have also built very good quality ships. I think, otherwise, there would not be so many of those in the waters right now. There are -- dry bulk ships are workhorses. Those ships that are built in the first-class Chinese yards, I would say, in terms of quality, they are just as good as Japanese yards. No, we hang on to certain ships in our fleet for many reasons. No, I don't think I can exactly concur to or confirm what reason that is. We will decide on whether to buy or sell certain ships based on quality, whether they fit our customers' needs as well as price. Price is always -- we have to reflect quality versus the price. No, we do not have any further news on the fixed contracts in the next quarter. Should we have locked in further fixed contracts, we will update the market as soon as that we have further fixed contracts fixed. I think they are still locked in from last year that are still running, but there are no new contracts. No new long-term contracts locked this quarter. The market has been too volatile for us to lock in any further long-term contracts. Maybe just to refresh everyone's memory, at the end of Q4 presentation, I've told you guys that around 50% of our vessels are under long-term contracts within 1 to 5 years. We will give you an update, should there be any further new contracts locked/fixed. I'm not going to guide any expectations of either loss or profit in Q2. You will just have to wait until the Q2 announcement. Thank you, Peter. I cannot exactly answer your question 100%, but I can partially confirm you, yes, we need to retain some dry powder for any opportunities for our fleet renewal. Any further questions? Every quarter, at the presentation, I always hear questions about the share price, et cetera, et cetera. I hear you, and I understand from your perspective, but I hope you can also understand that from our perspective, it's about the long-term performance of the company -- the financial performance of the company. And we are not -- it's very hard or it's -- we do not take actions or make decisions to facilitate any short-term trading. Okay. If there are no further questions, I call this an end to the presentation. Thank you for joining. In this volatile market, uncertain operating environment, we hope to bring you good news in the next quarter. Thank you very much.