Strong baht hurts RCL's Q2 profits

The company's net profit per share in the second quarter was Bt0.95, compared to Bt1.02 in the same period last year.

RCL posted Bt1.27 billion in net profit for first half of this year, falling from Bt1.48 billion for same period last year.

According to the statement, RCL also reported that the company and its subsidiaries have benefited from the strong demand in Europe and Middle East, the Group's Shipper Owned Container (SOC) lifting was up by 19 per cent year-on-year at 351,332 TEUs.

The Group's Carrier Owned Container (COC) lifting was up by 6 per cent year-on-year at 333,300 TEUs. Overall, total lifting of the group was up by 12 per cent year-on-year at 684,632 TEUs.

For the first six months of 2007, Shipper Owned Container lifting was up by 18 per cent year-on-year at 683,182 TEUs and Carrier Owned Container lifting up by 7 per cent at 644,842 TEUs. The total lifting for the first half of 2007 increase at 12 per cent year-on-year at 1,328,024 TEUs.

The consolidated turnover for the second quarter 2007 before exchange difference was Bt 5 billion compared to Bt5.04 billion the same quarter last year or down marginally by 1 per cent.

There were few factors contributed to this drop in turnover. Firstly, the Group's revenue is US dollar denominated while reporting currency is in baht. As US dollar continued to weaken against the regional currency in the second quarter 2007, Baht had strengthened close to 9 per cent against US dollar year-on-year.

The Group turnover suffered from this translation loss. Secondly, SOC had out grown COC in this quarter. As SOC revenue was lower than COC, there was an unfavorable freight rate mixed which impacted the average revenue per TEUs.

Thirdly, rate for Intra-Asia had been under pressure since the fourth quarter of 2005. Although the freight rates steadied since last quarter of 2006, the rate in second quarter 2007 was still lower compared to the same quarter last year. Other income in second quarter 2007 was up by 245 per cent at Bt173 million which was contributed by a disposal gain of one of the old vessel in April amount to Bt109 million.

For the first six months, total turnover before exchange difference was down by 2 per cent at Bt9.9 billion compared to Bt10.12 billion for the same period last year.

Contrary to the revenue, the strong Baht provided a translation gain to the Cost of freight and operation when majority of the Group's US dollar expenses were being translated to Baht. Even with a 12 per cent increase in liftings, the cost of freight and operation for the second quarter 2007 was Bt3.93 billion represent a reduction of 4 per cent compared to Bt4.1 billion for the same quarter last year.

The bunker price moved up substantially starting in late March. Whilst other cost items were in line with the improved lifting and increase in number of vessels under owned operation. For the first six months, the Cost of Freight and Operation was down by 3 per cent at Bt7.8 billion compared to Bt8.07 billion for the same period last year.