Profit before tax rising wisdom on freight rates, demand


IN THE DARK:
The company said bulk shipping rates are likely to continue to rise in the second half of the year and overall capacity will not catch up with demand in the next two years.

  • By Kao Shih-ching / Journalist

Wisdom Marine Lines Co (慧 洋 海運) yesterday announced pre-tax profit of NT $ 1.56 billion (US $ 55.88 million) for the last quarter, compared to a net loss of NT $ 301 million a year earlier, attributing it to higher freight rates and increased demand for bulk in the context of a global economic recovery.

Its second-quarter pre-tax profits were 74% higher than the reported NT $ 896 million in the first quarter, according to company data.

Profits totaled NT $ 3.3 per share for the first six months.

Photo: Wang Yi-hung, Taipei Times

Wisdom, the country’s largest dry bulk shipper, saw its revenue increase 59.5% year-on-year to NT $ 4.34 billion from April to June, which was also higher than 3 , NT $ 53 billion posted in the first quarter.

“The infrastructure plans of China and the United States, as well as the restored economic activities of other countries, have resulted in an increase in demand for freight transportation, while unresolved congestion at major seaports in the world amid ongoing disinfection measures has contained supply growth, ”Wisdom said in a statement.

“As a result, the demand versus supply situation has caused freight rates to rise,” he said.

The average freight rate for Wisdom ships climbed to about $ 30,000 per day at the end of last month, up 50% from the first quarter average of $ 20,000, the company said.

Wisdom said he expects bulk shipping rates to continue rising in the second half of this year, citing healthy demand.

He predicted that overall capacity would not catch up with demand over the next two years as the International Maritime Organization (IMO) plans to implement stricter rules to reduce the carbon intensity of international shipping from 2023.

Last month, the IMO adopted two new measures, the Energy Efficiency Index of Existing Ships and the Carbon Intensity Indicator, to assess the carbon reduction efforts and performance of ships, said Wisdom.

“As vessel owners prepare to comply with the new regulations, it is foreseeable that many shippers would withdraw their old vessels in advance, reducing overall capacity,” Wisdom said.

In the first six months of this year, Wisdom retired seven ships while taking delivery of six new ones to increase its overall energy efficiency, he said.

Meanwhile, the company’s board of directors last month approved a proposal to purchase three Kamsarmax-type vessels that produce lower carbon emissions and each can carry 82,400 deadweight tons from Tsuneishi Group. Zhoushan Shipbuilding Inc (常 石 集團 造船), at a total cost of less than NT $ 2.8 million.

The three new ships would be delivered in 2023 and 2024, he said.

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