Fri, Jun 07, 2019 - Page 12 News List

Wisdom Marine Lines upbeat on Q2 outlook

MAKING EACH GRAIN COUNT:Demand is increasing for small and medium-sized ships with the start of the peak season for Central and South American grain products

By Kwan Shin-han  /  Staff reporter

Wisdom Marine Lines Co Ltd (慧洋海運) is confident that the worst is over and this quarter will see improvement, an official said.

“The first quarter was the bottom for us, but we expect our business to recover this quarter as unfavorable factors phase out and demand grows from grain transportation,” a public relations official for the dry bulk shipper, who declined to be named, told the Taipei Times by telephone.

Demand for small and medium-sized cargo ships is increasing as the industry enters the peak season for the transportation of Central and South American grain products, the official said.

Demand during the first quarter was affected by the collapse of a Brazilian mine dam as well as the Lunar New Year holiday.

The Baltic Dry Index — which tracks the costs of transporting dry commodities such as coal, iron ore and grain — has shown an upward trend since February, the official said, adding that freight rates have also become stable this quarter despite the US-China trade dispute.

Stricter international regulations for ballast water treatment set to start in September, as well as higher standards for fuels with lower sulfur content that are to take effect in January next year, indicate a major improvement to the supply and demand dynamics in the shipping industry as older vessels are expected to retire, the official said.

Wisdom Marine plans to upgrade ballast water treatment systems in 11 of its ships, while its new vessels will be energy-efficient and have space for desulfurization equipment, he said.

The company plans to buy two Handy-size bulk ships, each with a deadweight of 37,800 tonnes, for less than US$25 million, with delivery set for next month.

It sold one small Handy-size ship in the first quarter and plans to retire and sell five more vessels this year, the official said.

The company on Wednesday reported consolidated revenue of NT$1.17 billion (US$37.24 million) for last month, up 4.46 percent month-on-month and 6.69 percent from a year earlier.

In the first five months of the year, revenue totaled NT$5.69 billion, an increase of 12.3 percent from the same period last year.

Pre-tax net income totaled NT$1.35 billion for the period, or earnings per share of NT$2.13, the company said.

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