Yang Ming Marine Transport Corp (陽明海運) on Thursday reported that it returned to the black last year with a profit of NT$11.98 billion (US$418.9 million), after a net loss of NT$4.3 billion in 2019, thanks to increased revenue, higher freight rates and relatively low bunker fuel prices.
Earnings per share last year reached NT$4.51, after losses per share of NT$1.66 in 2019, while revenue rose 1.4 percent to NT$151.28 billion, up from NT$149.18 billion, the company said, adding that gross margin rose to 17.24 percent, thanks to lower fuel costs.
The company’s board of directors decided not to distribute a cash dividend this year, continuing a policy began in 2011.
Photo: Ann Wang, Reuters
Yang Ming chairman Cheng Cheng-mount (鄭貞茂) has prioritized improving the company’s financial outlook, and last year’s earnings might be used to offset the firm’s accumulated losses.
Yang Ming said that the container shipping market experienced a downturn in the first half of last year due to the COVID-19 pandemic, but demand has increased since mid-August.
“The rebound was supported by a change in consumer behavior since COVID-19 lockdowns, including an accelerated adoption of e-commerce, and an increased need for hygiene products, housewares and work-from-home essentials,” Yang Ming said in a statement.
“Due to sudden inventory buildup, the surge in demand resulted in a global shortage of empty containers and capacity constraints, which led to an increase in freight rates on East-West and intra-Asia trade routes,” it said.
The upward trend continued through the end of last year, resulting in a fourth-quarter net profit of NT$10.12 billion, up from NT$1.85 billion in the previous three quarters, the company said.
The strong performance helped it eliminate the accumulated deficit by the end of last year, Yang Ming said.
To further enhance its financial outlook, the company said that it would increase capital by issuing up to 300 million new common shares and establish public underwriting through book building.
Yang Ming shares on Friday rose 1.5 percent in Taipei trading to close at NT$34.
The company’s share price has so far this year advanced 16.24 percent, compared with a 10.68 percent increase in the broader market, Taiwan Stock Exchange data showed.
Capital Investment Management Corp (群益投顧) on Friday retained a “buy” rating for the stock, saying that the company’s profit this quarter is expected to be higher than last quarter’s, as the container shipping market would benefit from higher freight rates on European and US routes.
“Major global container shippers have recently signaled that the market boom might continue through the third quarter of 2021, indicating that the shortage of containers and the port congestion have not yet been resolved in the short term,” Capital said in a note.
“It is expected that the freight rates on European routes will stop falling when the industry enters its peak season, and the freight rate on US routes will stay high due to persistent congestion at ports,” it said. “This will help support container shippers’ operating performance in the second quarter of 2021.”
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