Taiwanese container shipping companies' profits are expected to grow in the second half of this year owing to continued demand and a possible drop in international oil prices, sources said yesterday.
Evergreen Marine Corp (長榮海運), Asia's largest container shipping company by fleet size, reported NT$4.61 billion in net profits in the first half of the year, followed by Yangming Marine Transport Corp's (陽明海運) NT$4.02 billion and Wanhai Lines Ltd's (萬海航運) NT$2.45 billion.
With international oil prices expected to decline and with hikes expected in freight rates for various shipping routes, Evergreen Marine's net profits may reach NT$11.1 billion for the second half of the year, the sources said.
Yangming Marine, the world's 15th-largest container shipping company and Taiwan's second-biggest, may report NT$11 billion in after-tax net profits in the second half of the year, ahead of Wanghai Lines' NT$6.5 billion.
Freight rates for Asian and European routes will have been adjusted upward two to four times by the end of the year, the sources said, adding that the planned freight hikes, coupled with surcharges for the peak May-June period in the US will be able to offset 50-percent of oil costs.
The sources said that freight rates on European routes, adjusted upward in January, April and July, are likely to see another round of upward adjustment by US$150 per twenty-foot equivalent unit (TEU) in October, while rates on Asian routes are expected to be adjusted upward by US$50/TEU in September after an adjustment in March.
Evergreen Marine has 120 vessels and its earnings are expected to increase in the third quarter, as US retailers such as Wal-Mart Stores Inc ship goods for the Christmas holidays, analysts said.
Yangming Marine, which has a "tw-A" long-term rating by the Taiwan Ratings Corp (中華信評), is currently expanding its 66-vessel fleet to meet an expected rise in demand for global container shipping services.
The company, 40-percent of which is owned by the Ministry of Transportation and Communications, is scheduled to take delivery of 21 new vessels between this year and 2007.
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