TTA back in black on units' performance
Thoresen Thai Agencies' performance swung back to positive territory in the second quarter, recording a net profit of Bt135.4 million, compared with Bt288.3 million in losses in the previous quarter.
TTA attributed the turnaround to the better results of its subsidiaries Mermaid Maritime and PM Thoresen Asia Holdings (PMTA), as well as the latter’s investment in Sino Grandness.
Faring better than the market but continuing to suffer losses, the shipping business will likely pick up during the second half of the year, as the TCE (time charter equivalent) rate has been rising constantly since July.
The management expected a tough year but TTA’s investment-diversification strategy has steered it away from significant risks while allowing the company to enjoy positive returns, it said. It is waiting for the right time to invest more in promising, high-growth businesses.
Chalermchai Mahagitsiri, company’s president and chief executive officer, said the second quarter was a good period for TTA, which had incurred a loss in the first three months of the year. The successful recovery amid the global economic slowdown and stagnation was principally attributed to the better results of Mermaid Maritime and PMTA.
PM Thoresen Asia Holdings invested in the Vietnamese fertiliser market and Sino Grandness Food Industry Group, a food and beverage business in China that has been profitable since TTA’s investment.
However, because of the low TCE rate, the shipping business remained in negative territory. Unique Mining Services (UMS) also recorded a quarterly loss as a result of lower sales volume, oversupply and a fall in demand for coal.
For the second quarter, TTA’s total revenue stood at Bt5.99 billion, a rise of 13 per cent year on year and 31 per cent quarter on quarter. Gross profit dropped by 6 per cent year on year but jumped by 449 per cent quarter on quarter to Bt1.22 billion, with a gross margin of 20 per cent.
TTA showed a net profit of Bt135.4 million in the second quarter, a decrease of 47 per cent from Bt254.6 million for the second quarter of last year, but representing an increase of 147 per cent from a net loss of Bt288.3 million in the first quarter of 2015.
"It’s true this is a difficult year, given the global economic slowdown. Nevertheless, we have managed to record a profitable result, which reflects our prudent investment strategy," Chalermchai said.
"As a top holding company, we have diversified away from risks and reduced significantly the volatility associated with business cycles, which have enabled us to secure decent returns even in the current environment.
"We stress our commitment to identifying promising, high-potential businesses in which we could invest at the right time in the future to enhance our strength. In this connection, we will exercise great care and assess the risks inherent in such additional investment," he said.
