Jutha optimistic

Managing director Chanet Phenjati said yesterday that the Baltic Dry Index (BDI), a measure of shipping rates for dry bulk carriers, was starting to firm up as a result of a decline in supply of new vessels.

The BDI as of May 29 was 3,494, up 72 per cent from 2,034 on March 3. However, there is still some risk from crude oil prices, which have risen from US$40 a barrel last quarter to $60 this quarter, he said.

Jutha's fleet has grown to seven vessels - five for charters and two for liner service - with one more new vessel to join this year.

The firm plans to provide more ship management in Europe after it generated Bt5 million in revenue from managing one ship since last year.

"This year, the company will manage up to five vessels for other shippers and this can generate income of US$300 per ship per day," he said.

Management revenue would be booked gradually from this year until next year.

Jutha earned Bt6.53 million in net profit in the first quarter, down from Bt49.65 million in the same quarter last year.

Second-quarter results should also be worse year-on-year as the peak BDI this quarter was only 3,000 compared to 11,000 in the same quarter last year, he said.

"However, the shipping situation is getting better since early this year as it has passed the lowest point of the industry," he said.

The shipping industry is rebounding, especially with China and India importing more. However, demand for shipping still depends on the global economic recovery.

Some good news for the industry was that the number of vessels in the market has decreased, thanks to the scrapping of 359 vessels between January and May.

The company omitted to pay a dividend for last year because it had to reserve some funds for a new Bt600-million vessel of 12,000 dead-weight tonnes, which would be handed over in September.

About 80 per cent of the vessel's price will be financed by a bank loan and the rest will come from the company's internal cash.