Wed, Jan 01, 2014 - Page 13 News List

CSBC inks US$50m two-ship deal with Iseaco Ltd

By Kevin Chen  /  Staff reporter

The nation’s top shipbuilding firm, CSBC Corp, Taiwan (CSBC, 台灣國際造船), has signed an agreement with Singapore’s Iseaco Investment Pte Ltd to build two ships that are set to be delivered in the first quarter of 2016.

The Greater Kaohsiung-based CSBC said yesterday in a filing with the Taiwan Stock Exchange that it has finalized the deal to construct two ships for Iseaco Investment’s YL Singapore Shipping Pte Ltd and YL Colombo Shipping Pte Ltd. The 1,800 twenty-foot equivalent unit (TEU) vessels will each carry a price tag of US$25 million.

CSBC said the combined US$50 million value of the orders will contribute to its revenue, without elaborating.

In the first 11 months of last year, CSBC posted NT$22.49 billion (US$750.9 million) in consolidated sales, down 22.93 percent from the NT$29.18 billion recorded during the same period in 2012.

With the company working through low-margin orders, its net profit in the first three quarters of last year contracted by 31.56 percent annually to NT$378.19 million from NT$552.59 million.

Its earnings per share were NT$0.51 during the three-quarter period, compared with NT$0.74 in the same period the previous year, company data showed.

Taishin Securities Investment Advisory Co (台新投顧) said it expected the Taiwanese shipbuilder to be operating at full capacity until the end of next year to fill the orders that it has secured over the past few years.

CSBC is building four 8,000-TEU vessels for Evergreen Marine Corp (長榮海運), the nation’s largest container shipper — and two 4,600-TEU ships for Yang Ming Marine Transport Corp (陽明海運), the nation’s second-largest container shipper, at its shipyard in Greater Kaohsiung.

At its shipyard in Keelung, the ship builder is working on completing twelve 1,800-TEU vessels for Chinese container shipper SITC International Holdings Co Ltd (海豐國際控股).

However, Taishin Securities said that the low-margin orders the company has received over the past few years during negative global macroeconomic conditions would likely cause CSBC’s net profit to decline 36.5 percent year-on-year to NT$449 million, or earnings per share of NT$0.6, for the whole of last year.

The broker put CSBC’s net profit for this year at NT$440 million, or NT$0.58 per share, which would represent a slight drop of 2.2 percent, it said.

On Tuesday, the ship builder’s shares closed up 0.26 percent to NT$19.20, against the TAIEX’s 0.13 percent fall.

For the whole of last year, CSBC stock rose 7.56 percent, versus the benchmark index’s 11.85 percent rise in the same period, Taiwan Stock Exchange data show.

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