CSBC predicts jump in annual profit

State-run CSBC Corp. Taiwan (CSBC台灣國際造船), formerly known as China Shipbuilding Corp, yesterday predicted its pre-tax net profit would reach a record high of NT$4 billion (US$123.8 million) by year's end -- more than double last year's NT$1.49 billion.

CSBC's annual revenues are expected to leap to NT$29 billion this year from last year's NT$19 billion, said company president Fan Kuang-nan (范光男), who has been the acting chairman since May, when the chairman resigned.

"CSBC has secured orders until mid-2012, including a contract for six cargo ships signed with Wan Hai Lines Ltd (萬海航運) at a price of US$36.5 million per ship," Fan said at a ceremony to hand over the chairmanship to Cheng Wen-lon (鄭文隆).

The company also secured a contract for five cargo ships with the Yang Ming Group (陽明海運), he said.

CSBC has NT$10 billion in orders for commercial ships and another NT$10 billion in orders from the military, Fan said.

CSBC plans to list its stock on the Taiwan GRETAI Securities Market (櫃買中心) by the end of next year after becoming a private company, the president said.

In the future, Fan said CSBC plans to provide ship rental services as well as ship factory know-how to other countries.

Countries such as Vietnam, China, India and Thailand are beginning to tap into the ship manufacturing market as demand for ships has risen in recent years, Fan said.

But in spite of the increase in demand, Fan predicted that ship supply would grow faster and exceed demand by 20 percent in 2015.

Foreign clients used to make up 80 percent of CSBC's customers.

The situation has reversed, Fan said, with 80 percent of the shipbuilding company's customers now domestic.

Domestic clients receive a discount from CSBC because they make half of their payments in US dollars and half in New Taiwan dollars.

"Foreign clients pay in US dollars, which is riskier for us because of the fluctuation of exchange rates involved," Fan said.

After being sworn in, Cheng vowed to do his best to maintain CSBC's profit growth.

Born in 1952, Cheng has a doctorate in civil engineering from Washington University and was formerly deputy mayor of the Kaohsiung City Government. Prior to that post, he worked for the Cabinet's Public Construction Commission as its vice chairman and was in charge of overseeing the construction of the nation's second highway.

Cheng said that the company's privatization would be a top priority during his term and vowed to beef up the company's international competitiveness.