Wan Hai Lines Ltd (萬海航運), the nation’s third-largest container shipping company by fleet size, yesterday said it would swing into profit in the second quarter on the back of strong demand on its US routes and falling bunker fuel prices.
The container shipper said it also remained optimistic about the outlook for the third quarter as long as crude oil prices stop rising.
“Although Wan Hai posted a net loss [of NT$0.17 per share] in the first quarter, the company actually has been returning to the black since March,” Wan Hai vice president Davis Kao (高國隆) told reporters on the sidelines of the company’s annual shareholders’ meeting in Taipei.
Kao said steady demand on Asian routes had maintained the company’s sales, while a strong performance on its US routes had helped strengthen Wan Hai’s profitability throughout the second quarter.
Wan Hai has added capacity to its US routes by 800 twenty-foot equivalent units (TEU) a week to 1,600 TEU a week since the second half of last year as it lowered capacity on its routes to Europe, Kao said.
“The move contributed a lot to the company’s sales, providing evidence that it was the correct strategy,” Kao said.
Slowing bunker fuel costs led by a recent slide in crude oil prices also raised the company’s profitability in the second quarter, Kao added.
Kao said he remains optimistic the company’s profitability would continue to improve into the third quarter, as long as fuel prices maintain their current levels and do not rise to more than US$600 a tonne.
The company also plans to launch a route to South America — covering markets including Chile, Mexico and Ecuador — at the end of this month by running nine 2,000 TEU vessels, as it feels upbeat about demand in that region.
Wan Hai shares increased 2.21 percent to NT$13.85 yesterday in Taipei trading.