Wed, Jun 08, 2005 - Page 10 News List

Yang Ming warns of falling earnings


Yang Ming Marine Transport Corp (陽明海運),the nation's second-biggest shipping line by market value, said its earnings probably peaked last year and may slide in the fourth quarter because of increasing competition.

Yang Ming Marine is unlikely to repeat its record profit of NT$9.8 billion (US$314 million) last year as expansion undertaken by rival shipping lines may drive down earnings in the fourth quarter, said Gary Soang, vice president of the company's finance department, declining to give estimates.

Rising number of ships will put pressure on Yang Ming's profits in the next 10 years as annual earnings per share may drop to NT$4 earnings, at best, and at worse, to NT$2, less than half of what it made last year, Soang said.

Yang Ming is planning to increase its capacity by almost a third to meet rising demand for Asian goods from North America and Europe. About 80 percent of global trade is carried by sea.

"There may be some pressure in the fourth quarter, because of increasing supply of cargo services," Soang told reporters yesterday. "Last year was probably the peak for our per-share earnings."

Yang Ming, based in Keelung, plans to expand the container capacity by 32 percent before the end of 2007, from a fleet of 66 ships capable of carrying 188,494 20-foot boxes as of last Wednesday, according to a company report.

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