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Zhonghui Shipping Company reported a significant financial turnaround for the fourth quarter of 2024, moving from a net loss in 2023 to a net profit in 2024. The company’s revenue for Q4 2024 reached $44 million, contributing to a full-year revenue of $159 million. According to InvestingPro data, the company maintains impressive gross profit margins of 81.8% and has achieved a perfect Piotroski Score of 9, indicating strong financial health. Despite the positive financial performance, the company remains cautious due to ongoing market uncertainties and geopolitical risks.
Key Takeaways
- Zhonghui Shipping posted a net profit of $5 million in Q4 2024.
- The company expanded its fleet with three new vessels, increasing its total capacity.
- Chartering revenue saw significant increases both quarterly and annually.
- The company maintains a conservative outlook due to geopolitical uncertainties.
Company Performance
Zhonghui Shipping demonstrated a robust performance in Q4 2024, with a net profit of $5 million compared to a net loss in the previous year. The company benefited from a strategic expansion of its fleet, which included the acquisition of three new vessels and an increase in chartered-in vessels to nine. This expansion helped boost the company’s total fleet capacity to 2,300,000 megastats, with 26 owned vessels. The company’s strong financial position is reflected in its return on equity of 37% and minimal debt-to-equity ratio of 0.02, as reported by InvestingPro.
Financial Highlights
- Q4 2024 Revenue: $44 million
- Full Year 2024 Revenue: $159 million
- Q4 2024 Net Profit: $5 million
- Full Year 2024 Net Profit: $24 million
- Basic Earnings Per Share: 22 cents
- Gearing Ratio: 15%
- Proposed Final Dividend: 3 cents
Outlook & Guidance
Looking forward, Zhonghui Shipping plans to adopt a conservative approach due to market uncertainties, including geopolitical risks such as the ongoing Russia-Ukraine conflict. The company aims to maintain low risk and prioritize long-term viability while remaining open to selective fleet expansion opportunities. Trading near its 52-week low of $7.05, the stock presents an interesting opportunity for value investors. Detailed analysis and valuation metrics are available through InvestingPro’s comprehensive research tools and reports.
Executive Commentary
Executives emphasized the company’s commitment to long-term growth and cautious financial management. "We are not here for the short haul. We’re in this business for the long haul," stated one company executive. Another executive highlighted the importance of careful capital expenditure: "We would rather be conservative and spend any CapEx or windfall cash very carefully."
Risks and Challenges
- Geopolitical Risks: The Russia-Ukraine conflict and USTR proposals could impact market stability.
- Market Volatility: Fluctuations in freight demand may affect revenue.
- Supply Chain Issues: Potential disruptions could impact operations.
- Economic Uncertainty: Broader macroeconomic pressures could influence market conditions.
By focusing on strategic fleet management and maintaining a diversified cargo portfolio, Zhonghui Shipping aims to navigate these challenges while positioning itself for future growth.
Full transcript - Jumbo Interactive Ltd (JIN) Q4 2024:
Company Representative/Executive: Let’s go through the highlights for 2024.
For Q4 twenty twenty four, we recorded a revenue of US44 million dollars EBITDA at US19 million dollars and a net profit of US5 million dollars This included noncash reversal of impairment loss on group fleet of USD 6,500,000.0. Basic earnings per share, USD 0.047. Now for the full year 2024, we recorded a total revenue of 159,000,000 US dollars, EBITDA of 74,000,000 US dollars, a net profit of $24,000,000 also including that 6,500,000.0 of reversal of impairment, of course. For the full year, we have a basic earnings of 22 US cents, gearing ratio of 15%, and we are proposing a final dividend of 0.03 US dollars. This meeting is being recorded.
We have enjoyed, a fairly good, well, I would say pretty solid year. Good demand for driver commodities and a limit 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 a 80% increase in quarterly chartering revenue and for the full year, 94% increase in chartering revenue. This chart, you know, is very clear to show the comparison whether quarter on quarter or year on year.
I think this is fairly self explanatory. Q4 twenty twenty four, we have a profit of $5,200,000 versus Q4 twenty twenty three of a net loss of $27,700,000 For the full year 2024, we have a net profit of $24,000,000 versus full year net loss of $55,000,000 Similarly, this is also reflected through the time charter equivalent, which is also very clear. For Q4 twenty twenty four, the average TCE increased by 46%. Compared to Q4 twenty twenty three, which was $10,642 per day, Q4 twenty twenty four is $15,567 For the full year 2024, the average TCE is $14,741 per day versus twenty twenty three dollars nine thousand and sixty three per day. The shipping related expense increased to $84,400,000 dollars mainly attributable to the rise in higher payments as we entered into certain inward time charter engagements during the year.
Higher payment of $21,800,000 on short term leases was incurred during the year. The daily running cost of owner’s 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 and L of 4,900,000.0 US dollars. 90 5 million US dollars of CapEx was incurred during the year, mainly on acquisition of three delivered vessels and the capitalization of drydocking. During 2024, a drawdown of USD65 million loan upon delivery of three vessels and at the same time, a repayment of USD56 million in bank borrowings related to vessel mortgage loans.
As of thirty one December twenty twenty four, secured bank loans amounted to US98 million dollars with current portion and non current portion of $8,000,000 and $90,000,000 respectively. For the year 2024, we acquired two we concluded to acquire two Capesizes, one Panamax and one Ultramax. We have engaged with a shipyard in China, Jiangsu Hangtong, for the construction of two Ultramax newbuildings to be delivered in 2016 and 2017. Sorry, 2026 and 2027. My apologies.
As at 12/31/2024, ’20 ’5 owned vessels and eight chartered in vessels with a total carrying capacity of approximately 2,300,000 megastats. 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 $524,000,000 from $483,600,000 dollars as of end twenty twenty three.
Total (EPA:TTEF) equity has increased to $371,600,000 versus $349,900,000 in the end of twenty twenty three. Secured bank loans also increased slightly to 90, almost $98,000,000 from ’88 as of twenty three year end. Current ratio, 1.2721. Net gearing at 15%. Our available liquidity as of 2024, US40.9 million dollars And as of the end twenty twenty four, our ROE is 6.65% versus end twenty twenty three, 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, you know, from very old ship owning company that sometimes at certain time of a cycle, a ship owner 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 1,780,000 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 charter in vessel when the opportunity is suitable. We now have a total of nine chartered in vessels: one Capesize chartered in for long term, two Panamax for long term, one short term Panamax, two Ultra chartered in on long term, three chartered in for short term, in total nine vessels chartered in. This carrying capacity amounts to 764,000 debt rate metric tons. The total debt as of M24 amounts to US98 million dollars versus US88 million dollars 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 twelve months. Nine percent will be repayable within the next twenty four months.
Three 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, Twenty Four Percent China, Eleven Percent South America, Seven Percent Australia, Six Percent Africa, Three Percent North America, and 1% Europe. Note that this breakdown is through the chartering revenue instead of tonnages. In terms of discharging of cargo, 3035% of our cargos are discharged in Asia, excluding China Forty Three Percent are discharged in China Fifteen Percent in Africa 4 Percent North America 2 Percent in Europe and 1% in South America.
Here’s a more detailed breakdown of the time chartered 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 Suite, Q4 twenty twenty four, ’13 thousand ’9 hundred dollars which marks a drop from Q4 twenty twenty three. For the full year twenty twenty four, fifteen thousand five hundred and twenty eight. For Ultramax Supermax fleet, Q4 twenty twenty four, 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, USD14366 per day.
So for the, for Q4 twenty twenty four, the average TCE for all our ships, 15,567 and for the full year 2024, ’14 thousand ’7 hundred and ’40 ’1 dollars 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 looks encouraging. As ship owners, we’ve always try out, focus 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 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, seven ships, you know, we only got were only delivered, you know, in, let’s say, June, then it will be. Increase in daily running cost is due to initial running cost incurred for freshly delivered vessels. The daily vessel finance cost is calculated as the aggregate of vessels finance cost 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 costs for Q4 twenty twenty four, ’6 thousand ’8 hundred and ’70 ’2 versus Q4 twenty twenty three, ’6 thousand ’2 hundred and ’14. 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 2023 figure of RMB 5,569. Thank you for your message. I will address that in a minute. I also saw your email. An update on, this, very long legal saga between Paraco and our company.
I think the detail, were written in the announcements, 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, you know, involved, you know, several jurisdiction, namely Singapore, Hong Kong, as well as South Africa. So it took some time to, untie the knot. A settlement sum of about 3,500,000.0 was settled for the Hong Kong action, which is the the main knot that ties the global action together.
And Singapore dollar Singaporean dollars, 20 7 point 6 million were received. So in total, approximately $23,800,000 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 email 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, you know, 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, you know, with, the geo geopolitical risk right now.
So we rather, maintain a low gearing so that when the time comes, we can gear up. You know, we can we will always leave buffers for further gearing up when opportunity arises. I think this worry is not just our own view. It’s shared by other players within the industry. From secondhand secondhand asset prices to new building 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 named one, for example, which, you know, we we caught on time to, include in the presentation is, from The US potential actions from the US 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 twenty four or thirty six hours, there’s also news about, you know, the potential action over copper. So, we are facing a lot of uncertainties that is very, very hard to predict. So I, for example, I understand, you know, with good intentions, you know, you are very, some of our shareholders would have, you know, ideas about, you know, all m and a activities, blah blah blah, you know.
We hear that, but we are not only responsible for our shareholders, but for all stakeholders, you know, 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 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, you know, 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 Zhonghui’s freight demand?
Again, I think you you you rightly phrase this statement. The freight demand may decline. So, you know, to me and I’ve you know, it’s it’s 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 cons consideration analysis that we can stomach such risk, we will, whether secondhand market or even, selectively, newbuilding market will increase our tonnage. At the same time, we will also look for alternative ways to increase our tonnage, increase our carrying capacity by a chartered in vessel, some short term, some longer terms. This is the way how we manage the risk. You know, 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 note if you look at our loading and discharging analysis, we we’ve always do a very small proportion of business in North America. So should USTR, you know, impact the dry box shipping industry, we will just further shy away from that market. From my personal opinion, I think the USTR proposals, you know, may impact container shipping more than driver. Okay. Okay.
On the true Neptune, the new, 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, you know, I, you know, I do not have authorization to break this practice, so I’m afraid, you know, I cannot tell you the exact TC, income that is fetching on on its current contract.
I can give you some I can give you some flavor. It is not profitable right now, but we will very work very hard to turn it profitable. We’ll 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 Paracol, I think, we currently have no plans on to spend it yet. You know?
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, you know, 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, you know, in the in the in the horizon. So we would rather be conservative and spend any CapEx or spend any, you know, windfall cash very, very carefully.
I’m afraid we’ll have to use a microscope to look at the situation before we press any buttons. Boxes. Any further questions? I hope you guys can appreciate that, you know, 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 charges, you know, some of them are still, you know, obviously, working on short term contracts.
Some of them has been charted out on period charges. Our period charges would range from seven months to five years. And by the way, this is talking about the chartered Uh-huh. You one 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 seven months to five years chartered out. One comment on the your questions.
I think in 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’ll continue to look to do so. Okay. If there are no further questions, I call this an end.
I encourage you to email me, not at the IR. Email me at you can always mail in any query, questions to me directly at the following email address. Thank you very much for joining us. Have a good day, everyone. Thank you.
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