U-Ming Marine Transport Corp (裕民航運), one of the nation’s major bulk shippers, expects the market to reach an equilibrium in 2015 on the back of improving supply and demand.
The company will further increase its capacity and upgrade its fleet at the end of 2015 or the first half of 2016 to boost its profitability as the bulk shipping industry recovers.
“The worst has passed,” U-Ming Marine president C.K. Ong (王書吉) told shareholders at the company’s annual general meeting.
Ong said the industry might still see some volatility this year and next because of oversupply.
However, given the sluggish sentiment over the past two years, fewer shippers have ordered new vessels. With a slower increase in supply, the market might reach an equilibrium by 2015, he said.
Meanwhile, the US Federal Reserve’s plan to stop quantitative easing may reduce the flow of speculative money, including to the shipping industry, Ong added.
Optimistic about the industry’s outlook, U-Ming plans to distribute a cash dividend of NT$2.50 per share this year, although its net profit last year only amounted to NT$1.8 billion (US$59.31 million), or NT$2.10 per share.
That sparked a rally in U-Ming’s stock, which climbed 3.01 percent to close at NT$44.45 yesterday, outpacing the local bourse, which slid 0.45 percent, Taiwan Stock Exchange data showed.
U-Ming Marine spokesman Stephen Chen (陳秀能) said the company is scheduled to take delivery of 14 vessels by the end of 2015 or the first half of 2016, placing the company in a better position to benefit from improving industry fundamentals.
The company reported a net income of NT$197.54 million, or NT$0.23 per share, in the first quarter of the year, compared with a net profit of NT$585.57 million, or NT$0.68 per share, a year earlier, company data showed.