Sat, Nov 06, 2004 - Page 11 News List

Shipping companies hike forecasts, citing recovery

HIGHER DEMAND The nation's two biggest container shippers revised their profit forecasts for this year by 54 and 29 percent on rising demand for Chinese exports

BLOOMBERG

Evergreen Marine Corp (長榮海運) and Yang Ming Marine Transport Corp (陽明海運), the country's two biggest container shippers, raised their profit forecasts for this year as they increased shipments of Chinese-made toys, textiles and other goods.

Evergreen Marine, Asia's biggest shipping line by fleet, said it will probably have net income of NT$11.53 billion (US$348 million) this year, up 54 percent from a previous forecast announced in April. Yang Ming, Taiwan's second-largest shipper, raised its profit by 29 percent to NT$9.27 billion.

Evergreen cited in a statement to the Taiwan Stock Exchange a "global economic recovery that prompts demand for cargo volumes and pushes shipping charges higher." Asia's shipping lines are benefiting from increasing demand in the US and Europe for Chinese toys, textiles, electrical appliances and other exports. Chinese exports grew 38 percent to US$412.3 billion in the first nine months of this year. Container ships carry an estimated 80 percent of global trade.

Taiwan's exports of computers, computer chips and other goods rose 19 percent in September, increasing demand for cargo space from manufacturers such as Taiwan Semiconductor Manufacturing Co (台積電) and Quanta Computer Inc (廣達電腦), the world's largest maker of notebook computers.

On the Taiwan stock exchange, Evergreen Marine's shares rose 1.6 percent to NT$31.40 before the shipping company raised its full-year outlook. Yang Ming's shares advanced 3.3 percent to NT$30.90.

Taipei-based Evergreen said its earnings per share this year will be probably be NT$5.01, compared with previous a prediction of NT$3.28. Sales will be NT$39.66 billion, from its previous estimate of NT$34.51 billion.

Yang Ming's sales may rise to NT$76.21 billion, from a previous forecast of NT$71.11 billion, said the company, which is based in Keelung, Taiwan's second-largest port.

Evergreen had a profit of NT$3.60 billion posted last year and Yang Ming reported net income of NT$6.65 billion.

The two shippers raised their full-year forecasts after their third-quarter profits rose more than expected on expanding exports from China.

Evergreen Marine's profit more than doubled to NT$4.34 billion in the period, the company said on Oct. 29. Yang Ming said its net income rose 21 percent to NT$3.01 billion.

Credit Suisse First Boston cut its share price estimates for Evergreen and Yang Ming today before the new forecasts were announced, citing an expected slump in earnings in 2006.

Evergreen was cut to "underperform" from "neutral," by analysts Andrew Lee and Karen Chan, who predict the company's net income will fall to NT$3.36 billion in 2006 from a projected NT$12.39 billion for next year.

Yang Ming Marine was downgraded to "neutral" from "outperform" by the CSFB analysts, who said the shipper's profit may fall to NT$3.22 billion in 2006 from NT$10.82 billion next year.

``A lot of ships will be coming through and this will push freight rates down,'' Chan said in a telephone interview.

The number of container ships worldwide will increase by 12 percent next year, according to London-based shipbroker Clarks Plc, outstripping growth in the global shipping trade, which Drewry Shipping estimates will expand 9 percent.

This story has been viewed 2477 times.
TOP top