Sat, Jan 14, 2012 - Page 12 News List

Wan Hai denies planning to cut its European portfolio

MULLING ITS OPTIONS:Lines in Asia account for more than 90% of the company’s profits, so any changes in Europe would have only minimal effect

By Amy Su  /  Staff Reporter

Wan Hai Lines Ltd (萬海航運), the nation’s third-largest container shipper in terms of fleet scale, said yesterday that despite a slowing global economy, the company has not yet made a decision on cutting its portfolio in Europe.

The Chinese-language Commercial Times reported yesterday that the container shipper plans to exit the European market by cutting charters it rented from its peers, but the company said in a stock exchange filing that the newspaper report was just speculation.

“Wan Hai always has a team to evaluate if the company should adjust its number of freighters,” company spokesman Davis Kao (高國隆) said by telephone. “So far, we have not decided to make any changes on European lines.”

Since most research institutes have forecast the global economy will grow by between 2 percent and 3 percent this year, demand for container shipping might not be very strong, Kao said.

However, compared with other major container shippers, Wan Hai’s profitability would be relatively stable, as regional lines in Asia account for more than 90 percent of the company’s revenue, he said.

“Although sales in regional lines are usually smaller than those in long-haul lines, costs in regional lines are also much lower than those in long-haul lines, helping the company balance the risk,” Kao said.

In addition, container shippers may benefit from a better control of freight prices this year through increasing global alliances, he added.

Wan Hai reported NT$5.06 billion (US$168.67 million) in sales last month, down 13.39 percent from a year earlier, but up 3.9 percent from November. For the whole of last year, revenue totaled NT$62.7 billion, 3.11 percent lower than the previous year, company data showed.

Wan Hai shares rose 0.33 percent to NT$15.15 in the local bourse yesterday, compared with the TAIEX’s 0.07 percent decline.

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