Although sales last quarter declined 12 percent over last year, it was better than a 20 percent plunge in the first six months of the year
By Kao Shih-ching / Staff reporter
Wisdom Marine Lines Co (慧洋海運), the nation’s largest dry bulk shipping company by fleet size, turned profitable last quarter, on recovering demand from the US and Chinese markets and rising freight rates, the firm said on Wednesday.
The company reported a pretax profit of NT$117.52 million (US$4.1 million) during the July-to-September period, with pretax profit per share of NT$0.16, ending two consecutive quarterly losses, corporate data showed.
Wisdom’s sales last quarter declined 12 percent year-on-year to NT$3.12 billion, a milder slump than their 20 percent plunge in the first six months of the year, as demand for freight remained weak amid the COVID-19 pandemic, the company said.
Business began picking up as the industry entered its peak season with rising demand for bulk shipping of grain products from North America to other markets, Wisdom said in a statement.
Orders from China also rose as Beijing bought an additional US$200 billion of US commodities as part of a “phase one” trade agreement with Washington, the company said.
As a result, the Baltic Dry Index — compiled by the London-based Baltic Exchange and which tracks the shipping costs of raw materials, such as coal, iron ore and grain — recovered to a comparatively high level in the quarter ending last month, hovering at 1,264 to 1,803, compared with a range of 393 to 1,799 a quarter earlier, the firm said.
Expecting the demand to continue climbing, Wisdom said it was upbeat about its fourth-quarter outlook, due to peak season demand for sea freight.
For the first nine months, Wisdom remained in the red with a cumulative loss of NT$301 million, or minus-NT$0.42 per share.
The company expects its bottom line to improve next quarter, amid recovering business and disposal gains from retiring aged vessels, it said.
Wisdom is cautious about the risk of a second wave of COVID-19 in the winter, but as many countries have instituted virus prevention measures at seaports, shipping operations should not be significantly affected, it said.
Given that a U-shaped rebound is predicted for the global economy next year, the company expects sea freight demand to stabilize, as sea shipping plays an important role in international trade, Wisdom said.
In related news, Evergreen Marine Corp (長榮海運) on Thursday reported annual revenue growth of 15 percent for last month, totaling NT$19.35 billion, which led to 11 percent annual growth last quarter, amounting to NT$55 billion.
In the first nine months of the year, Evergreen saw its cumulative sales remain flat from a year earlier at NT$142 billion, as strong gains in sales last quarter offset declines in the first two quarters, corporate data showed.
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