Thu, Jul 09, 2009 - Page 12 News List

CSBC forecasts steady revenues to 2013

SHIPSHAPE: The shipbuilder hopes to benefit from international regulations stipulating that oil companies use double-hulled ships, which are far less likely to result in oil spills

By Elizabeth Tchii  /  STAFF REPORTER

CSBC Corp, Taiwan (台灣國際造船), the nation’s leading shipbuilder, said orders are full until 2013, including two oil tankers, four commercial ships and 28 Taiwanese naval vessels, despite recent order delays by Yang Ming Marine Transport Corp (陽明海運) and Wan Hai Lines Ltd (萬海航運) and a cancelat

The Kaohsiung-based shipmaker expects revenues to remain steady this year because of rising sales in oil tankers, oil product vessels and bulk carriers, CSBC president Li Chih-cheng (李志城) said yesterday.

However, Li declined to provide a revenue forecast for the year.

The company’s sales fell 30.1 percent year-on-year to NT$2.13 billion (US$65 million) last month, while the first-half sales were nearly unchanged at NT$16.95 billion from a year earlier, it said in a statement yesterday.

Amid a downturn in the shipping industry, “The company is now focusing on major government projects from CPC Corp, Taiwan (台灣中油) and Taiwan Power Co (Taipower, 台電),” Li said at a contract-signing ceremony with CPC in Taipei.

“International maritime regulations requiring the upgrading of oil tankers from second-generation to third-generation vessels by 2015 have also boosted CSBC’s business,” Li said.

Third-generation tankers are double-hulled vessels and are less likely to cause oil spills than second-generation tankers, which only have one layer of steel.

“The newer technology [for the upgrade] will not only reduce transportation costs and decrease carbon dioxide emission, but also be more environmentally friendly by eliminating highly toxic oil spills,” Li said.

CSBC secured an order of NT$3.2 billion (US$97 million) to produce two 40,000 TEU (20-foot equivalent unit) tankers for the state-owned oil refiner.

One of the vessels is scheduled for delivery in January 2011 and the other for June 2011, CPC president Chu Shao-hua (朱少華) said at the event.

CPC will still need to replace two 6,000 TEU, two more 40,000 TEU, one 70,000 TEU and six 300,000 TEU oil tankers as the company shifts to the next generation carriers.

CSBC said in a stock exchange filing on Tuesday that it had reached an agreement with its client, All Oceans Transportation Inc (全洋海運), to delay delivery of 14 container ships.

All Oceans is wholly owned by Yang Ming Marine.

The notice to the stock exchange came after Wan Hai asked to delay an order for 24 container ships last month and Zim Integrated announced the cancellation of six vessel orders in April.

Li said yesterday that the penalty for the Israeli’s cancelation would be about 20 percent — not the previously reported 10 percent — of the NT$7.3 billion order.

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