Bulk shipper U-Ming Marine Transport Corp (裕民航運) said it is optimistic about the second half of this year as the shipping industry is expected to stabilize, although the US-China trade dispute has affected business so far this year.
The company’s goal is to grow slightly this year, U-Ming chairman Douglas Hsu (徐旭東) told reporters on the sidelines of the company’s annual shareholdings’ meeting in Taipei yesterday.
“We are not pessimistic for this year, as the US and China are still expected to settle their trade dispute by reaching an agreement, which would reduce the trade dispute’s negative impact on our business,” Hsu said.
Chinese imports of iron ore and grain products are expected to recover in the second half of the year, which would also benefit the shipping industry as a whole, Hsu said.
Shareholders approved a proposal to distribute a cash dividend of NT$1.8 per share, representing a payout ratio of 91.3 percent based on the company’s earnings per share of NT$1.97 for last year.
The stock closed at NT$31.4 on the Taiwan Stock Exchange yesterday, suggesting a dividend yield of 5.7 percent.
While the dividend yield was lower than the average of 5.9 percent seen over the past 10 years, it was higher than most local companies’ offerings, said Hsu, who is also chairman of the shipping arm’s parent company, Far Eastern Group (遠東集團).
Hsu said that U-Ming would continue upgrading its fleet this year to improve cost efficiency and profitability, after net profits for the first quarter dropped 57 percent from a year earlier to NT$90.82 million (US$2.88 million) and cumulative revenue for the first five months declined 9.04 percent year-on-year to NT$3.43 billion.
The declines were mainly due to slowing demand for iron ore and grain shipments to China, U-Ming chief financial officer Bismark Chang (張宗良) told the Taipei Times by telephone.
The collapse of a Brazilian mine dam in January, falling freight rates and a slowdown in the global economy also affected business, Chang said.
Freight rates were higher last year as companies rushed to ship their goods before new tariffs took effect, he said, adding that they fell to a three-year low in the first quarter, but have recovered since last month.
“Freight rates are expected to continue going up in the second half of this year,” Chang said.
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