Earnings by the nation’s cargo shippers showed signs of a recovery in the first half of the year, as a supply glut-induced downturn across the globe began to subside.
The supply and demand balance has begun normalizing as mounting losses force a consolidation in the shipping industry, such as the collapse of South Korea’s Hanjin Shipping Co in September last year, while some cargo shippers were prompted to update their fleets and delay delivery of new vessels, analysts have said.
An improving global economic growth outlook has also led demand and freight prices higher, easing earnings pressure on shippers.
Evergreen Marine Corp (長榮海運), which posted a net loss of NT$6.61 billion (US$217.9 million) last year, swung back to a profit of NT$313 million in the first quarter this year. First-half net profit surged to NT$3.09 billion, or earnings per share of NT$0.88.
The company reported that sales last month rose 35 percent annually to NT$14.31 billion and said that it expects rates to continue rising this month and next month as peak-season price hikes come into effect.
Sales in the first seven months of the year totaled NT$85.86 billion, 24.6 percent higher than a year ago, company data showed.
Evergreen Marine shares advanced 6 percent to close at a three-year high of NT$21.20 in Taipei trading yesterday.
Growth forecast for global shipping capacity is expected to drop markedly from 5.1 percent next year to 0.2 percent in 2019, Evergreen Marine chairman Anchor Chang (張正鏞) said at an investors’ conference in Taipei yesterday, citing industry reports.
Chang added that the IMF and the WTO also gave upbeat forecasts on global GDP growth and trade for this year.
The company has also benefited from cost savings, improved market penetration and opportunity from pools of customers from its membership in the Ocean Alliance, which it joined in September last year.
Separately, Yang Ming Marine Transport Corp (陽明海運) saw its cumulative net loss improve from NT$14.9 billion at the end of last year to minus-NT$1.35 billion in the first half.
Sales in the first seven months of the year were NT$75.51 billion, 17.6 percent higher than a year ago.
Wan Hai Lines Ltd (萬海航運), which weathered the downturn to post a net income of NT$1.14 billion last year, slid into the red in the first quarter, posting a net loss of NT$203 million, before recovering to post a net profit of NT$675 million last quarter.
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