Robust sea cargo demand drives T3EX profit surge

ADVANTAGE OF SCALE:
With the pandemic driving shipping demand, T3EX said it was able to best smaller competitors as it has better connections with shippers

• By Kao Shih-ching / Staff reporter

Freight forwarder T3EX Global Holdings Corp (台驊國際投資控股) saw net profit soar 368 percent annually to NT$808 million (US$28.98 million) last quarter, thanks to strong demand for cargo and record-high sea shipping rates.

Last quarter’s net profit was a record high, the company said on Thursday.

Third-quarter revenue advanced 187 percent annually to NT$11.16 billion, while gross profit expanded 319 percent year-on-year to NT$2.86 billion and gross margin climbed to 25.68 percent from 17.55 percent a year earlier, company data showed.

For the first three quarters, T3EX registered a net profit of NT$2.9 billion, 6.9 times higher from a year earlier, or earnings per share of NT$22.4, the data showed.

The company attributed the gains to a sea shipping boom, as its revenue from sea freight forwarding soared 280 percent annually to NT$8.37 billion last quarter, supported by high freights rates, it said in a statement,

The COVID-19 pandemic continued to limit the supply of sea cargo capacity, but demand for sea transportation remained strong due to a global economic recovery, which supported an uptrend in freight rates, it said.

“When it is more difficult to book cargo space due to demand exceeding supply, we have an advantage over peers with smaller business scale, as we have a better connection with shippers,” T3EX said.

Air freight rates also went up last quarter due to strong demand to transport electronic devices, boosting T3EX’s gross profit from air cargo by 20 percent to NT$212 million, it said.

Overall, as import demand from the US and Europe soared, many Asian markets’ export momentum became more robust, T3EX said.

T3EX’s revenue from China, Taiwan and other East Asian areas grew 199 percent, 129 percent and 204 percent respectively, while revenue from Southeast Asia slowed to a low double-digit percentage, as some countries imposed lockdown measures amid the COVID-19 pandemic, it said.

However, the company expects business in Southeast Asia to recover quickly in the fourth quarter, it said.

Overall, it holds an upbeat outlook for the fourth quarter, on expectations that growing retail sales in US and electronic device sales would continue pushing up shipping demand, it said.