This printed article is located at
http://samudera.listedcompany.com/qa_20010628.html
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Hello to all. My name is Pak Randy
(CEO of Samudera Shipping Line Ltd). I am pleased
to participate in the ShareInvestor forum. Let
me answer the questions one by one. |
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Lestat, you asked:
i) Samudera has been expanding operations into the Middle-East
and China over the last 2 years. How has it been doing in
these 2 regions? Understand competition is quite stiff at
these areas.
Our answer:
For the Middle East, at the beginning we established ourselves
as a new-comer and penetrated the market to get support from
customers. The period was challenging, as the competition
was and is tough, like what you wrote. We started with one
service i.e. Dubai-Bandar Abbas. We have now an extensive
Intra Gulf service connecting all the Upper Gulf ports. We
have also linked Gulf to Indian Sub Continent (Karachi, Kandla
and Mumbai) and South East Asia through consortium with other
major shipping lines. Therefore from a small base we managed
to improve our business and are now regarded as an established
player in that region. We resumed our China service with the
routing of Shanghai – Hong Kong - Singapore –
Port Klang – Hong Kong – Shanghai. We experienced
that cargo from China is much stronger than cargo to China.
To improve cargo volume to China we added some more ports
of call i.e. Bangkok and Laem Chabang (Thailand) and the result
has been satisfactory.
By
Samudera
On Thursday, 28 Jun 2001 02:21pm
Posting #216
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Hi Lestat,
you asked:
ii)There were a no. of strikes at Indian ports in the current
year, notably at Kandla and Madras. Believed Samudera's vessels
call at these locations and there were delays in port calls
due to these strike. Will the delays have a significant cost
impact on Samudera?
Our answer:
There is no port congestion in Kandla caused by labour strikes.
However, in Madras (Chennai), it has been causing significant
delays to vessels operation. Consequently, in order to recover
additional costs all carriers have applied congestion surcharge
since then.
You asked:
iii) Year 2001 has not been a good year for shipping in general
with the slowdown in global trade and increased capacity.
There was also increased political instability in Indonesia
and Philipines. As exports out of Indonesia comprised a significant
portion of SSL's business, will this affect sales significantly?
Our answer:
In spite of the political instability in Indonesia, total
throughput of containerized cargo this year is stable compared
to last year. Therefore, our sales have not been affected
by political instability in Indonesia.
You asked:
iv) Due to trade slowdown, there is greater competition for
freight among shipping lines and many have resorted to rate
cutting. Does Samudera have any measures to counter this erosion
in profitability?
Our answer:
There is an Asian Feeder Discussion Group, which has been
in existence for more than 5 years. This group has been useful
to maintain an open dialogue among the feeder operators in
order to avoid unhealthy competition. As a feeder operator,
our CCAs (connecting carrier agreements) with main line operators
are applied on annual basis, therefore they can help to avoid
rate cutting. Internally we have intensified cost efficiency
programs.
You asked:
v) Understand that SSL has a policy of holding assets light
by chartering vessels for most of its services. In view of
the firm vessel charter rates/service expansion programmes,
will this increased operating expenses drastically?
Our answer:
The charter hire rates have not increased significantly. As
a matter of fact, based on the advice from our ships broker
we expect the rates to soften in the future. For any service
expansion we always conduct feasibility study and implement
such expansion only when the project is feasible.
You asked:
vi) Samudera has been making profits consistently but it has
been ignored by financial institutions/funds. Since 1999,
its share price has been sinking. Does management have a plan
to market SSL and improve its profile? Unlocking of value?
Our answer:
There is a general impact from the depressed stock market
situation in Singapore. Moreover, our share price may have
been depressed because of a misperception about our Indonesia
link. Actually political instability in Indonesia has not
negatively affected our business and performance. We shall
be consistently delivering this message to the investing community
in order to clear the misperception.
While steering the company to the right strategic direction
and keeping the business profitable are amongst the primary
roles of the Board, we also recognize the importance of Investor
Relations functions. We have reviewed the current situation
and have made some plans in improving the public profile of
the company. We tried to communicate more clearly about our
business philosophies in our latest Annual Report.
We are proud to share with you that, the Management has been
commended by some shareholders in producing a better Annual
Report this year. Management has always been open and transparent
in its communication with the investing community. We are
working on making more frequent communication with the in
vesting community. As a matter of fact, our holding of this
forum, is part of such program. We shall be increasingly looking
for more news opportunities, which would be communicated through
press releases, announcements, web site postings. We shall
be also looking for opportunities for press coverage of Company
Profile.
In this month, Samudera was featured in Tradewinds. Last but
not least, we are working on increasing the analysts coverage.
Hope, I could adequately respond to your query.
You asked:
vii) Regarding future expansion plans, do you look towards
organic growth or mergers and acquisition? Any plans to tie
up with other lines?
Our answer:
In our expansion plans, we want to do not only geographical
diversification, but also product diversification such as
forwarding and logistics / distribution businesses and therefore
merger or acquisition is possible.
Regarding the tie up with other lines, we have been doing
it operationally and will continue to do it as we believe
that this can help our expansion plans.
Thanks once again.
By Samudera
On Thursday, 28 Jun 2001 02:32pm
Posting #217
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Hi Thedoors, you asked:
Since listing, the company's shares have fared poorly. What
is management planning to do about that?
Our answer:
I believe I have answered the similar question. Please see
my answer to Lestat’s question.
Thedoors, you asked:
The dividends paid by the company is very, very low. Why?
I'm a smalltime holder of Samudera, but it is painful to see
its share price so low, and worse to receive little dividends.
Thanks for answering my Qs.
Our answer:
When making decision of a Company’s dividend policy
we try to adopt a common policy practised by most public companies
in Singapore. Our dividend payout policy is not too aggressive
since we have several projects that need own fund/equity participations.
However, besides trying to enhanced investor awareness and
interest, we will look at the possibility to improve our dividend
payout ratio in future. Thank you for your questions
By Samudera
On Thursday, 28 Jun 2001 02:38pm
Posting #218
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Hi Thedoors, you asked:
Gather from contacts in the industry that freight rates for
the Asia-US routes have fallen by around 15% from the end 2000
levels. According to freight forwarders in Singapore, there
has been a sharp 2Q drop in volume, which come on the back of
a 3% drop in Q1. As a result, freight rates are likely to come
under more pressure.
Q: How does Samudera stand up to such pressures? Where is your
shield?
Next, trade volume growth is expected to slow down sharply in
the coming few quarters. That means that container volume growth
is likely to slow down (Singapore traffic already down 13% in
April) at a time when container capacity is expected to rise
by 11%.
Q: Will not Samudera be affected
by slower volume growth?
Our answer:
Let me answer your two questions together.
The pressure on the freight rates is mainly in the Asia –
North America trade as well as Asia – Europe trade. This
is due to lower cargo volume resulting from economic slowdown
as well as higher deployment of ships capacity resulting from
delivery of bigger ships. Although Samudera does not participate
in such trade lanes we may be indirectly exposed to risks of
lower cargo volume. In such event we have the benefit of flexibility
due to our higher usage of chartered fleet. We can and will,
if necessary, reduce the capacity either by releasing the chartered
ships or chartering smaller ships. This will facilitate in achieving
balance between supply and demand. This is our main shield.
Additionally we will also consider to cooperate/form alliances
with other shipping lines.
By
Samudera
On Thursday, 28 Jun 2001 02:46pm
Posting #219