Thai intra-Asia carrier Regional Container Lines’ net profit for Q1 2021 grew 240-fold to THB2.94 billion (US$94.19 million), a figure the management described as “phenomenal” as it was more than double the THB1.3 billion (US$43.42 million) net profit for 4Q 2020.
Although cargo volume grew by just 6% from Q1 2020 to 517,000TEU, the shortage of capacity placed upward pressure on freight rates, pushing Q1 net profits 68% higher than the net profit for all of 2020.
Tight capacity saw freight jump to an average of THB13,795/TEU (US$442) in Q1, compared with THB8,588/TEU (US$287) in Q1 2020.
RCL MD Sumate TanthuwanitRCL managing director Sumate Tanthuwanit said that the company achieved record revenues of THB7.2 billion (US$230.55 million) in the first quarter. “Unlike Q4 2020 which saw freight spikes caused mainly by the scarcity of boxes, the Q1 2021 freight hike was intensified by additional scarcity of vessels. Congestion among ports became prevalent in Q1 2021.”
He added that cost management resulted in the cost of sales dipping by 2% from Q1 2020, to THB3.87 billion (US$123.92 million). Costs of purchasing slots on other carriers’ services were also down 49% to THB264 million (US$8.45 million) as RCL deployed more owned ships after purchasing three second-hand vessels.
Sumate hinted at more vessel purchases amid rising ship charter costs, saying, “Owning more ships would be beneficial to the overall operation and competition.”