U-Ming hoping to benefit from sales of ships, shares

By Amy Su  /  Staff reporter

Tue, Jul 02, 2013 - Page 14

U-Ming Marine Transport Corp (裕民航運), one of the nation’s major bulk shippers and a member of the Far Eastern Group (遠東集團), plans to sell off some vessels and offload shares in other Far Eastern affiliates to improve its profitability this year.

The Baltic Dry Index (BDI) — a measure of shipping costs for commodities — stood at 1,171 points on Friday, an increase of nearly 40 percent from a month earlier, an indication that the bulk shipping industry may have seen freight rates bottom out.

However, U-Ming Marine spokesman Stephen Chen (陳秀能) remained relatively cautious about the company’s operating profitability this year.

“It would be challenging for the company to generate income from its core business this year,” Chen told a press conference yesterday.

Chen said U-Ming Marine — which operates about 50 bulk ships — aims to maintain its profitability this year by strengthening non-operating income, including selling off old vessels and selling shares of other units at the group.

The company sold off two ships in the first half of this year, and plans to offload another two older vessels in the second half, Chen said.

In terms of core business, the company will do its best to reach the break-even point this year, and expects the recent rush of demand for iron ore from China to consistently raise freight rates, Chen added.

Oversupply has hampered the global shipping industry over the past two years, with the number of new bulk vessels this year still expected to reach 1,000, the same as recorded last year.

However, U-Ming Marine president C.K. Ong (王書吉) told shareholders last month that the bulk shipping market may achieve equilibrium in 2015 on the back of improving supply and demand.

The company reported net income of NT$197.54 million (US$6.56 million), or NT$0.23 per share, in the first quarter of the year, compared with a net profit of NT$585.57 million, or NT$0.68 per share, a year earlier, the company’s stock exchange filing showed.

Its shares fell 0.11 percent to NT$46.95 yesterday, compared with the TAIEX’s 0.33 percent drop.