Major bulk shipper U-Ming Marine Transport Corp (裕民航運) yesterday said it expects profitability to rise annually this year on the back of strong nonoperating income and the robust seasonal demand it projects for the second half of the year.
“The company will benefit from rising demand in China for imported iron ore in the near term,” U-Ming Marine chairman Douglas Hsu (徐旭東) told reporters after an annual shareholders’ meeting.
The shipper, which is part of the Far Eastern Group (遠東集團), posted NT$360.39 million (US$12 million) in net income in the period from January to March, compared with NT$197.54 million last year.
It reported earnings per share of NT$0.42 for the quarter, marking an increase from the previous year’s figure of NT$0.23 per share.
Last year, the company’s net income was NT$1.57 billion, or NT$1.83 per share, down from the preceding year’s NT$1.82 billion, or NT$2.12 per share.
Bulk shippers this year have enjoyed lower costs than they did last year, with the Baltic Dry Index (BDI) — a measure of shipping costs for commodities — posting a decline of more than 50 percent since the beginning of the year.
However, company president C.K. Ong (王書吉) said that U-Ming Marine’s speed in upgrading its fleet, which leads its peers’ by three to five years, will give the shipper an advantage in terms of its vessels’ energy-efficiency.
In addition, the upgrades will enable U-Ming Marine to better meet the stronger seasonal demand expected in the fourth quarter — the industry’s traditional peak period — as well as contribute to its annual sales and profits, Wang said.
The bulk shipping company is also expected to receive a considerable cash dividend from Far Eastern International Bank (遠東銀行) through the 12.6 percent stake it holds in the affiliated bank.
Far Eastern International Bank plans to distribute a cash dividend of NT$0.25 a share in the third quarter.
Profitability is also to be boosted by an increase in nonoperating income resulting from the company’s plan to dispose of a 20-year-old ship, U-Ming Marine spokesman Stephen Chen (陳秀能) said.
The shipper plans to book the targeted US$6.8 million gain this quarter, which would boost its earnings per share by NT$0.23 this year, Chen said.
Shareholders yesterday approved the shipper’s plan to distribute a cash dividend of NT$2 per share.
Excluding the dividend payouts, the company’s distributable retained earnings are to stand at NT$12.7 billion, or NT$14.78 per share, which is to be available for distribution to shareholders in the future, U-Ming said.
U-Ming Marine has a total cash position of NT$13.7 billion as of the first quarter and is set to take delivery of 12 new vessels over the next few years, it said.
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