Thu, Jul 04, 2019 - Page 12 News List

Wisdom Marine credits diversification for resilience

By Kao Shih-ching  /  Staff reporter

Wisdom Marine Lines Co (慧洋海運), the nation’s largest dry bulk shipping company by fleet size, yesterday said that its diversification strategy has made it more resilient in a volatile market, evidenced by improved revenue so far this year, despite the negative effects of the US-China trade dispute.

The dry bulk shipper reported revenue of NT$1.14 billion (US$36.62 million) for last month, up 5.28 percent year-on-year, with cumulative revenue totaling NT$6.83 billion for the first half of this year, up 11.08 percent from the same period a year earlier.

“It was a better performance compared with our peers. Thus far, the US-China trade dispute has had a limited effect on us, as we are not dependent on the Chinese market, nor any single raw material,” Wisdom chief financial officer Bruce Hsueh (薛亦駿) told the Taipei Times by telephone.

While U-Ming Marine Transport Corp’s (裕民航運) revenue was affected by reduced Chinese imports of iron ore and grain products earlier this year, Wisdom was less affected, as it transports a variety of products, including cotton, cement, sugar, coal, wood and fertilizers, Hsueh said.

Wisdom also saw less effect from sudden shocks due to the trade dispute, such as falling Chinese imports of soybeans, he said.

As the company has multiple clients and diversified markets, its business could recover faster than if affected by a single incident, Hsueh added.

“However, the trade dispute has affected us in terms of market sentiment and second-hand vessel prices. We have become more conservative about new investments, as we cannot see a clear direction for the global economy amid the trade dispute,” he said.

Wisdom this year bought two Handy-size bulk ships and plans to take delivery of another three vessels in the second half of this year, followed by another six this year and seven in 2021.

The company had hoped to sell older vessels after receiving new ones to make a profit, but failed to sell any of them in the first half of the year, as prices fell amid an oversupply in the market, Hsueh said.

For the first six months, cumulative pretax profits totaled NT$1.38 billion, up 105 percent from the NT$674 million posted in the same period a year earlier, company data showed.

This was because of rising revenue and US$22.6 million in compensation from a Japanese client, which in April terminated its contract in advance, Hsueh said.

Overall, the company expects to see its revenue and profits continue expanding in the second half of this year and plans to increase its capital as high as NT$800 million later this year, he said.

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