Sat, Apr 15, 2017 - Page 12 News List

No plan to acquire Shih Wei, Wisdom Marine chair says

By Ted Chen  /  Staff reporter

Wisdom Marine Group (慧洋海運集團), one of the nation’s largest dry bulk shipping companies by fleet size, yesterday said that although the company has no immediate plan to acquire Shih Wei Navigation Co Ltd (四維航業), it did not rule out the possibility in the future.

“While the company is open to options that are beneficial to shareholders, it is not the right time to act, at least not this year,” Wisdom Marine chairman James Lan (藍俊昇) said following an extraordinary board meeting that approved paying an increased dividend to the company’s shareholders.

Lan said that Shih Wei, a company founded by his elder brother J.D. Lan (藍俊德), has been posting losses since the final quarter of 2015 and a move to acquire the carrier would “not be sound.”

However, James Lan said that the two firms have plans to collaborate in June through business alliances and joint procurement bids for new vessels and parts to yield cost savings.

Meanwhile, James Lan expects the dry bulk shipping sector to recover this year and said that Wisdom Marine had renewed the contracts of 10 vessels since the beginning of this year.

The renewed contracts had significantly improved terms, bringing a 30 to 40 percent gain in gross margin for the company, he said.

Looking ahead, more than 20 vessels are scheduled to have their contracts renewed later this year and are expected to help boost overall gross margin by at least 20 percentage points, he said.

The company reported gross margin of 16.43 percent last year, down from 24.1 percent the previous year.

Last year, Panamax class vessels with 5,000 twenty-foot-equivalent units had an average daily rent of between US$4,000 and US$5,000, but prices have climbed to between US$11,000 and US$12,000, James Lan said

The company has 50 vessels with improved fuel efficiency, which would help it attract time charter customers, as they they would be able to take advantage of an estimated US$3,000 in daily fuel cost savings, he said.

The company reported net income of NT$1.4 billion (US46.1 million) last year, down 37.67 percent year-on-year, or earnings per share of NT$2.69.

Wisdom Marine plans to distribute a NT$1 cash dividend and a NT$0.5 stock dividend.

The company posted sales of NT$2.75 billion in the first quarter of this year, down 5.15 percent year-on-year.

Wisdom Marine shares fell 0.91 percent to close at NT$32.8 in Taipei trading yesterday.

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