Wisdom Marine forecasts stronger half, weaker year

WISE MOVES::The shipper said the annual profit drop it expects this year is due to low freight rates, but it sees a bright second half, as it has already secured tenant orders

By Amy Su  /  Staff reporter

Wed, Jul 10, 2013 - Page 14

Wisdom Marine Group (慧洋海運集團) yesterday said it predicts its profit will decline annually this year, even though it expects business to pick up in the second half of the year from the first six months.

The bulk shipper attributed the profit drop to the impact of weak freight rates the industry has seen throughout the year, a company official said.

“Despite the sector’s sluggish sentiment, the company will maintain its strategy of building vessels during the current low-cost period and seeking to sign long-term contracts with partners,” Wisdom Marine chairman James Lan (藍俊昇) told reporters following the company’s quarterly investors’ conference.

Currently, European integrated commodities producer Glencore Xstrata PLC, Japanese shipper Kawasaki Kisen Kaisha Ltd — also known as K Line — and UK-based Swire Shipping Ltd are all long-term Wisdom Marine partners.

The company is scheduled to take delivery of five vessels in the second half of the year, Lan said, adding that it has already secured long-term contracts with tenants for all the vessels, which could raise the firm’s gross margin, boosting its profitability.

Wisdom Marine is to take delivery of another 11 vessels next year, seven of which already have tenants, providing more support to expectations that business will rebound next year, Lan added.

Lan said most of the vessels under construction are energy-saving ships, which the shipper believes will be the sector’s main trend in the future and could save 15 percent to 20 percent in fuel compared with similar vessels.

In addition, the company is scheduled to issue global depositary receipts at the London Stock Exchange by the end of the year. That would make Wisdom Marine the first Taiwanese-founded company to list on the UK’s main bourse.

Wisdom Marine, which currently operates an 89-vessel fleet, saw its pre-tax profits total NT$868.06 million (US$29.26 million), or NT$2.2 per share, in the first six months of the year, a decrease of 28.7 percent from the same interval a year earlier, the company said in a financial statement.

Consolidated revenue totaled NT$4.04 billion in the first half of the year, down 2.72 percent from a year earlier, the statement said.

In related news, U-Ming Marine Transport Corp (裕民航運), another major Taiwanes bulk shipper, saw consolidated sales drop last month by 19.82 percent from May to NT$517.61 million, the company said in a stock exchange filing.

For the first half, U-Ming’s consolidated sales were NT$3.3 billion, a 21.57 percent drop from a year ago, stock exchange data showed.