Wisdom Marine Group (慧洋海運集團), one of the nation’s major bulk shippers, expects its profitability to trend upward for a second consecutive year next year, supported by proceeds from selling three ships set to be delivered next year and increases in rental income.
In an effort to refurbish its fleet, the company, which currently operates a total of 95 bulk ships, is to take delivery of 15 new vessels next year, with fleet scale hitting the 100 mark officially.
Wisdom Marine has unveiled a pre-sales plan for three of the new ships, which may help generate net profit of at least US$6.5 million, which may translate into earnings per share (EPS) of NT$0.4 for the company next year, company spokesman Bruce Hsueh (薛亦駿) said yesterday.
Of the other 12 new ships, the company has signed a leasing contract for 11 of them for between two and 15 years, with gross margin standing at 54.1 percent to bring in a total of US$40 million in rental income, Hsueh added.
In addition, the continuing depreciation of the yen may boost Wisdom’s Marine’s profitability next year.
Wisdom Marine currently holds yen-denominated loans of ￥7.6 billion (US$63.1 million), with every 10 percent decrease of the yen against the US dollar to give the bulk shipper US$576,000 in profit on exchange, data offered by the company showed.
“Under the abundant capital flows, the company may be able to distribute higher dividends from strong profit,” Hsueh told an investors’ conference.
Pre-tax profit reached NT$1.52 billion (US$47.9 million) from January through last month, up 9.23 percent from a year earlier, with pre-tax EPS standing at NT$3.19 in the first 11 months of the year, the company said in a statement.
Despite continuing sluggish sentiment in the global bulk shipping industry, Wisdom Marine chairman James Lan (藍俊昇) said the company has maintained its expansion pace on the back of its strategy to lease ships in long-term contracts, starting from years ago.
The strategy has enjoyed a higher daily rental rate than the average market level for this year, as all 10 new ships it took delivery of this year have been in a leasing contract for between three and 15 years, with average gross margin totaling 50.6 percent.
The company saw consolidated sales standing at NT$8.2 billion in the first 11 months of the year, up 8.22 percent from the same period last year, the statement said.
Shares rose 0.14 percent to close at NT$36.55 on the local bourse yesterday, compared with the benchmark TAIEX’s 0.6 percent increase.
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