Jinhui Shipping and Transportation Ltd

OSE:JIN

Good morning and good afternoon to everyone. Welcome to Jinhui Shipping and Transportation Limited Q4 2024 and Annual Results Presentation. If anyone cannot hear me, please let me know through the chat. Okay. Let's begin. Apologies, someone is still coming in.

To go through the highlights for 2024. For Q4 2024, we recorded a revenue of USD 44 million, EBITDA at USD 19 million and a net profit of USD 5 million. This included noncash reversal of impairment loss on Group's fleet of $6.5 million. Basic earnings per share, $0.047.

Now for the full year 2024, we recorded a total revenue of USD 159 million, EBITDA of USD 74 million, a net profit of USD 24 million also including that USD 6.5 million reversal of impairment, of course. For the full year, we have a basic earnings of USD 0.22, gearing ratio of 15% and we are proposing a final dividend of USD 0.03 per share.

We have enjoyed a fairly good -- well, I would say, pretty solid year. Good demand for dry bulk commodities and a limited supply of vessels. We took actions to expand our fleet, both in terms of our own tonnage as well as chartered in tonnage, and we recorded a significant increase in performance -- financial performance. For Q4, we have an 80% increase in quarterly chartering revenue and for the full year, 94% increase in chartering revenue.

This chart is very clear to show the comparison whether quarter-on-quarter or year-on-year. I think this is fairly self-explanatory. Q4 2024, we have a profit of $5.2 million versus Q4 2023 of a net loss of $27.7 million. For the full year 2024, we have a net profit of USD 24 million versus full year net loss of USD 55 million. Similarly, this is also reflected through the time charter equivalent, which is also very clear.

For Q4 2024, the average TCE increased by 46% compared to Q4 2023, which was USD 10,642 per day, Q4 2024 is USD 15,567. For the full year 2024, the average TCE is USD 14,741 per day versus 2023, USD 9,063 per day.

The shipping-related expense increased to $84.4 million, mainly attributable to the rise in higher payments as we entered into certain inward time charter engagements during the year. Higher payment of $21.8 million on short-term leases was incurred during the year. The daily running cost of owned vessels slightly increased from $5,569 of 2023 to $5,606 for year 2024, because certain initial running costs and expenses were incurred for newly delivered vessels.

We recorded a net gain on financial assets at fair value through P&L of USD 4.9 million. USD 95 million of CapEx was incurred during the year, mainly on acquisition of 3 delivered vessels and the capitalization of drydocking.

During 2024, a drawdown of USD 65 million loan upon delivery of 3 vessels and at the same time, a repayment of $56 million in bank borrowings related to vessel mortgage loans. As of 31 December 2024, secured bank loans amounted to USD 98 million with current portion and non-current portion of $8 million and $90 million, respectively.

For the year 2024, we acquired -- we concluded to acquire 2 Capesizes, 1 Panamax and 1 Ultramax. We have engaged with a shipyard in China, Jiangsu Hantong for the construction of 2 Ultramax newbuildings to be delivered in 2016 and 2017 -- sorry, 2026 and 2027, my apologies. As at 31st of December 2024, 25 owned vessels and 8 chartered-in vessels with a total carrying capacity of approximately 2.3 million metric tons.

I think this summary is very self-explanatory, so I'm not going to go through it. It's fairly simple.

Key financial ratios. Our total assets has increased to $524 million from $483.6 million as of end 2023. Total equity has increased to USD 371.6 million versus USD 349.9 million in the end of 2023. Secured bank loans also increased slightly to almost USD 98 million from USD 88 million as of '23 year-end. Current ratio 1.27:1. Net gearing at 15%. Our available liquidity as of 2024, USD 40.9 million. And as of the end of 2024, our ROE is 6.65% versus end of '23, minus 14.47%.

Our fleet has been evolving since the inception of the company. We're now -- it will go up and down. There's always a saying that -- from very old ship-owning company that sometimes -- at a certain time of the cycle, a shipowner can have no owned tonnages. As of today, we have 26 owned vessels. Here's the list of our 26 owned vessels, which amounts to 1.78 million deadweight metric tons, average age 14.46 years.

In order to expand our carrying capacity without too much CapEx, long-term CapEx or owning the ship, we have been steadily increasing our chartered-in vessel when the opportunity is suitable. We now have a total of 9 chartered-in vessels, 1 Capesize chartered for long term, 2 Panamax for long term, 1 short-term Panamax, 2 Ultra chartered-in on long term, 3 chartered-in for short term; in total, 9 vessels chartered-in. This carrying capacity amounts to 764,000 deadweight metric tons.

The total debt as of end '24 amounts to USD 98 million versus USD 88 million in 2023. And if you look at the green bar -- sorry, the green bar is the numbers for 2023. We have worked to further extend the debt maturity profile. 8% will be repayable within the next 12 months, 9% will be repayable within the next 24 months, 3 years and beyond 83%.

In terms of the cargo mix, the types of commodities that we carry, 60% are in minerals, 18% coal, 11% steel product, 4% agricultural products, 2% cement, 1% fertilizer and 4% others.

In terms of where we load our cargo, 48% will be in Asia, excluding China, 24% China, 11% South America, 7% Australia, 6% Africa, 3% North America and 1% Europe. Note that this breakdown is through the chartering revenue instead of tonnages.

In terms of discharging of cargo, 30% -- 35% of our cargoes are discharged in Asia, excluding China; 43% are discharged in China, 15% in Africa, 4% North America, 2% in Europe and 1% in South America.

Here is a more detailed breakdown of the time charter equivalent. For Q4, TCE of our Capesize is $24,500. And when we look at the full year, the TCE for Capesize is $24,298. For our Panamax fleet, Q4 2024, $13,900, which marks a drop from Q4 2023. For the full year 2024, $15,528. For Ultramax / Supramax fleet, Q4 2024, the TCE is $15,356, which is a significant increase compared to Q4 in 2023. And for the full year 2024, the TCE of this sector of ships, USD 14,466 per day.

So for Q4 2024, the average TCE for all our ships, USD 15,567 and for the full year 2024, USD 14,741 per day. From both Q-on-Q as well as year-on-year, it's a significant improvement. We hope that this trend will continue, which since the current trend, it looks encouraging.

As shipowners, we have always tried our -- focused a lot of our effort into keeping cost under control. Inflation is something that always keep us on our toes. The daily vessel running cost is calculated as the aggregate of crew expenses, insurance, consumable stores, spare parts, repairs and maintenance and other vessels' miscellaneous expenses divided by ownership days during the year or period, depending on, for example, 7 ships, were only delivered in, let's say, June 1, it will be pro rata.

Increase in daily running costs is due to initial running costs incurred for freshly delivered vessels. The daily vessel finance cost is calculated as the aggregate of vessels finance costs divided by the ownership days during the year or period. Some vessel mortgage loans were fully repaid during the first quarter.

The depreciation is calculated as the aggregate of vessels depreciation divided by ownership days during the year or period. The decrease was mainly due to the decrease in carrying amounts of owned vessels after the recognition of impairment loss on vessels in 2023. Of course, when we have a reverse in impairment, there could be some slight changes in the depreciation figures in the next quarter. I think those who follow our company closely would appreciate that.

The running cost for Q4 2024, $6,872 versus Q4 2023, $6,214. But if we look at the full year, I think this -- our running cost is still very competitive. For the full year 2024, the daily running cost is USD 5,606 per day, a very, very small increase over the full year 2023 figure of USD 5,569.

Thank you for your message. I will address that in a minute. I also saw your e-mail. An update on this very long legal saga between Parakou and our company. I think the details were written in the announcement. So I urge you to read that in detail. In a nutshell, we have formally brought the ongoing global legal dispute to an end. Because the overall legal battles involved several jurisdictions, namely Singapore, Hong Kong as well as South Africa. So it took some time to untie the knot.

A settlement sum of about $3.5 million was settled for the Hong Kong action, which is the main knot that ties the global action together. And SGD 27.6 million were received. So in total, approximately USD 23.8 million were received in April 2024 and January '25, respectively.

Outlook. This is always the difficult one to call. From the industry perspective, the supply-demand fundamentals remain in favor. However -- and I note this gentleman who wrote me an e-mail over his various suggestions on reviving the share price. Really appreciate that.

We remain in a very low gearing because we are operating in an increasingly uncertain operating environment, not just shipping, but in terms of the financial markets, interest rate cycle. It's very, very hard or literally impossible to put your chips on to whether interest rate going down or going up, especially with the geopolitical risk right now. So we rather maintain a low gearing so that when the time comes, we can gear up -- we will always leave buffers for further gearing up when opportunity arises.

I think this worry is not just our own view. It is shared by other players within the industry. From secondhand asset prices to newbuilding asset prices, it has come to -- it is kind of corrected or right now a little frozen because many -- most of industry players are on the sidelines. I think the -- I name one, for example, which we caught on time to include in the presentation is from the U.S. potential actions from the U.S. government on the USTR proposals. It's still unknown what would be -- if it goes through what would be the impact.

In the last -- I can't remember 24 or 36 hours, there's also news about the potential action over copper. So we are facing a lot of uncertainties that is very, very hard to predict. So for example, I understand with good intentions, have very -- some of our shareholders would have ideas about M&A activities, blah, blah, blah. We hear that. But we are not only responsible for our shareholders, but for all stakeholders, including our seafarers, including our staff. And our main objective is for the long-term viability of the company. We are not here in for the short haul. We're in this business for the long haul.

We have seen the best of times in shipping, but we have also seen the worst of times in shipping, where I can very openly say some of our current shareholders have not seen. So it's all very, very nice and easy for some shareholders for their own short-term share price performance make very, very various colorful suggestions, but we have to consider the issues from more directions than you can imagine.

Answering Anthony's question, Russian-Ukraine war may end soon. Once the war is finished, the freight demand may decline. Will this affect Jinhui's freight demand?

Again, I think you rightly phrased this statement. The freight demand may decline. So to me, and I -- it's a billion-dollar question, it may or may not decline. So what we have been doing is, as you can see, our overall own tonnages fleet is increasing in age. When the opportunity arise, and we determined after various consideration and analysis that we can stomach such risk, we will -- whether the secondhand market or even selectively newbuilding market, we will increase our tonnage.

At the same time, we will also look for alternative ways to increase our tonnage, increase our carrying capacity by chartered-in vessel, some short term, some longer term. This is the way how we manage the risk. We want to increase our business, increase our revenue. But at the same time, we do not want to expose ourselves to too much long-term risk.

Right now, on the USTR issued a notice, as I highlighted, we do not see any impact on our capacity and cost. If you look at our loading and discharging analysis, we have always do a very small proportion of business in North America. So should USTR impact the dry bulk shipping industry, we will just further shy away from that market. From my personal opinion, I think the USTR proposals may impact container shipping more than dry bulk.

On the True Neptune -- sorry, it's actually New Neptune. We have made announcement on the cost of that vessel. It is not in our practice to disclose individual ship TCEs. So I'm afraid I do not have authorization to break this practice. So I'm afraid I cannot tell you the exact TCE income that it's fetching on its current contract. I can give you some flavor. It is not profitable right now, but we will work very hard to turn it profitable. We will be monitoring the markets very, very carefully and pick the counterparties as well as contracts very carefully to make this or to cause the ship generate positive cash flow for the company.

For the cash received from Parakou, I think we currently have no plans to spend it yet. We're very rather old-fashioned when we receive money, we keep it in the wallet and let it warm a little while first before deciding how to splash it, if you get what I mean. As I have just described, despite the industry fundamentals seems encouraging. But we see that we are entering a period where there are many, many unpredictable uncertainties in the horizon. So we would rather be conservative and spend any CapEx or spend any windfall cash very, very carefully. I'm afraid we will have to use a microscope to look at the situation before we press any buttons.

Any further questions? I hope you guys can appreciate that shipping is -- when you look at it from the outside, it's a very simple business model, but the number of factors that we have to consider really is often more than a non-practitioner can imagine. So...

In terms of the length of the charters, some of them are still obviously working on short-term contracts. Some of them has been chartered out on period charges. Our period charges would range from 7 months to 5 years. And by the way, this is talking about the chartered out.

Any further questions? Sorry, I'm not sure whether I paused -- muted just now.

"On the length of charters, I presume you're talking about chartering out."

Our fleet will be engaged in both short-term spot to longer-term charters. And for those which are on period charters, they range from 7 months to 5 years chartered out.

One comment on your questions. I think a very good observation, Peter, on the -- seems very stable in Q4. We have been taking the opportunity to lock some of our fleet -- some of our ships out to secure visible recurring income. We will continue to look to do so.

Okay. If there are no further questions, I call this an end. I encourage you to e-mail me, not at the IR e-mail. But you can always mail in any questions to me directly at the following e-mail address.

Thank you very much for joining us. Have a good day, everyone. Thank you.