Wed, Apr 18, 2012 - Page 11 News List

Evergreen Marine shares drop amid pact to lease ships

Bloomberg

Evergreen Marine Corp (長榮海運) saw its shares fall to the lowest in more than two months yesterday after its parent group announced a preliminary accord to lease 10 mega-vessels.

Evergreen Marine shares dropped 5.6 percent to NT$16.75, the lowest closing price since Jan. 31.

Evergreen Group (長榮集團) signed a memorandum of agreement to lease 10 ships able to hold 13,800 containers each from Korea Infrastructure Investments Asset Management Co, according to a statement. The ships, due to start entering service in the fourth quarter of next year, may worsen a capacity glut that has pushed rates to unprofitable levels, said Parker Wu (吳年恭), who oversees the equivalent of US$100 million of assets for Agricultural Bank of Taiwan (農業金庫).

“As the supply of ships rise, prices will fall,” he said. “Investors are also worried about the market, as the fundamentals are a bit weak.”

Hyundai Heavy Industries Co would build the vessels, according to the statement. The shipyard rose 0.8 percent in Seoul yesterday. Company spokesman Kim Jun-o confirmed that talks were under way.

Evergreen said the new vessels would help it pare cuts on services to Europe, as they are larger and more fuel-efficient than existing ships. The price of 380 Centistoke Bunker Fuel, used by ships, has jumped 46 percent in the past two years in Singapore trading.

Taipei-based Evergreen Marine posted a net loss of NT$3.09 billion (US$105 million) last year, compared with a profit of NT$15.2 billion in 2010.

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