On February 27, Ge Longhui Group (00137.HK) announced that for the year ended December 31, 2023, the company's subsidiary Jinhui Shipping's revenue decreased by 46% to US$81.868 million compared to US$152 million in 2022. Jinhui Shipping recorded a net comprehensive loss of US$5.555 million in 2023, including a net impairment loss of US$14.011 million for self-owned vessels and an impairment loss of US$5.693 million on right-of-use assets, while in 2022 it recorded a net comprehensive loss of US$7.113 million, including an impairment loss of US$49.326 million for self-owned vessels. The basic loss per share during the year was $0.504.
In 2023, the dry bulk shipping market will face challenges. Under the increasingly challenging macroeconomy, demand for dry goods in bulk was sluggish, causing market freight rates to weaken for most of 2023. Market sentiment gradually changed in the fourth quarter of 2023. Increased demand for dry goods in bulk during this period led to a slow rise in market freight rates. The average daily relative rent fell from $18,813 in 2022 to $9,063 in 2023. The net consolidated loss during the year was mainly due to poor sentiment in the dry bulk shipping market for most of 2023, leading to low freight rates. Compared with strong global demand for dry bulk products in 2022, market freight rates rebounded significantly. The consolidated net loss during the year was also due to an impairment loss of USD 1.288 million due to confirmed holdings of sold assets (ships sold) in 2023.
In the current dry bulk shipping market situation, Jinhui Shipping conducted an impairment loss review on Jinhui Shipping's fleet at the end of 2023 to reflect changes in our expectations for the global economy and the future of the dry bulk shipping industry. The assumptions applied in estimating the use value of our self-owned vessels and right-of-use assets have been adjusted accordingly. A net impairment loss of USD 14,011,000 and impairment loss of right-of-use assets of USD 5,693,000 was confirmed on 31 December 2023, while a loss of impairment of USD 49,326,000 was confirmed on 31 December 2022. Impairment losses on self-owned vessels and right-of-use assets are non-cash and will not affect Jinhui Shipping's operating cash flow.