The shipper, which has diversified in recent years when the shipping business was hit by a global oversupply, has no acquisition plans in its business year ending September, Managing Director Chandchutha Chandratat told Reuters, saying it would focus on existing business and selling unprofitable assets.
"Freight rates remain weak and that will continue to erode our profits ... If the Baltic index stays around 1,300 this year, it is unlikely our earnings will meet the forecast," Chandchutha said, when asked if net profit would meet the 1.2 billion baht ($39.4 million) forecast by Thomson Reuters I/B/E/S.
The company reported a 56 percent fall in net profit to 795.5 million baht in its previous business year, far below the record 8.78 billion baht in 2008.
The Baltic Exchange's main sea freight index <.BADI>, which tracks dry commodity shipping rates, closed at 1,317 on Thursday, compared with 1,773 at the end of December.
"It should take several years until we see an improvement in the shipping business as the number of new vessels is expected to rise 20 percent worldwide, while demand is generally growing by only 5 to 6 percent," Chandchutha said. "I don't think we'll see a balance until 2014."
"Due mainly to falling freight rates, second-quarter net profit should fall from the previous quarter," he said.
The company reported first-quarter (Oct-Dec) earnings of 145.5 million baht, against a net loss of 65 million baht a year earlier, helped by gains from selling two vessels.
At 0748 GMT, Thoresen Thai shares were down 0.54 percent at 18.30 baht, reversing from a 1 percent gain in morning trade after the Reuters story. The main index <.SETI> was up 0.72 percent.
Mermaid Seen Improving
To cushion the fall in dry bulk shipping, Thoresen would look to its existing energy and logistics businesses as their business was improving, and it planned to cut costs by selling unprofitable assets, Chandchutha said.
Its shipping business contributes around 42 percent of revenue, with the rest coming from energy and logistics.
"What we invested over the last 18 months ago is generating good returns, so we don't have plans to seek new investment," said Chandchutha. "But each investment is quite small. The key driver is still shipping and Mermaid."
Thoresen owns 57.14 percent of Singapore-listed Mermaid Maritime , an operator of offshore services and a drilling business.
It expected a rise in oil prices to help Mermaid's performance from April this year after a net loss in its first quarter (Oct-Dec) and for the last business year.
"If the oil price rises above $100 a barrel, demand for drilling will be stronger. So I expect Mermaid should get better from April after making losses," Chandchutha said.
Thoresen Thai, which mainly ships steel, coal, grain and other agricultural products, planned to sell another five or six older vessels in the business year.
Two new ships delivered this year would then take its total fleet to around 20 vessels, Chandchutha said.
Thoresen, which also owns 89.55 percent of Thai coal trader Unique Mining Services PCL , competes with local rivals such as Precious Shipping and vies with Southeast Asian shippers including Malaysia's MISC Bhd . (Reuters)
