Singamas Slumps After Forecasting Substantial Profit Drop
Singamas Container Holdings Ltd. (716), the world’s second-largest maker of shipping boxes, slumped the most in nearly 10 months in Hong Kong trading after forecasting a “substantial” decline in full-year profit.
The stock fell as much as 7.6 percent, the most since March 6, before trading 6.1 percent lower at HK$1.85 as of 11:31 a.m. Hong Kong’s benchmark Hang Seng Index was little changed.
Singamas expects 2012 net income to decline from the $138.6 million posted a year earlier as sales and gross profit margin drop on the economic downturn in Europe and the U.S., the company said in a Dec. 28 filing, without providing an earnings figure. The market weakness may continue until the second half of next year, it said in the filing issued after the market’s close that day.
“Singamas has been hit by a waning demand for containers,” said Lawrence Li, a Shanghai-based analyst at UOB- Kay Hian Holdings Ltd. “Shipping companies reduced demand for new boxes as they idled vessels amid a glut of ships and also cut replacement budgets for existing ships to save costs.”
Containers are installed in container ships to move goods such as toys, clothes and food. The current average price for new twenty-foot boxes is about $2,200 each, Li said. By comparison, prices could reach as much as $2,600 in September and October, Singamas Chief Executive Officer Teo Siong Seng said in August.
Hong Kong’s market will trade for half a day today.
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