Robust rates and some lucky timing are putting bulker owners such as Shih Wei Navigation in the pink.
Conservative Taiwanese bulker owners are cashing in on higher time-charter rates while at the same time putting a smile on the faces of their shareholders.
With their preference for long-term charters, Taiwanese owners may not have been able to take advantage of record-high spot rates but in a happy twist of fate, many are looking forward to record profits as time charters come up for renewal.
Donald Yun, president of Taipei-based Shih Wei Navigation considered one of the fastest-growing ship-owners in Taiwan with a fleet of over 30 vessels ranging from small general cargoships to panamax bulkers tells TradeWinds that he expects his company's profits will jump by 40% in 2008. In 2007, Shih Wei posted a net income of TWD 1.82 bn ($54.7m).
Yun says he expects the dramatic rise in Shih Wei's profit partly because the company has four new vessels joining the fleet this year and partly because it arranged new time charters for six vessels early this year and at the end of last year.
"It was a very good time to be able to negotiate new charters as the rates were very high," said Yun, without elaborating on the financial details.
Shih Wei employs its seven handysizes, two panamaxes and two supramaxes exclusively on long-term charters, while its multipurpose (MPP) and general cargoships are operated directly by itself.
Yun points out that revenue for these smaller vessels has also increased substantially over the past year.
"In the early part of last year, our 7,000-dwt general cargoships were earning about $6,000 per day, which we thought was a good rate at the time. Now they are earning above $8,000 per day," he said.
Analysts say Taiwanese dry-bulk operators such as Shih Wei have been performing well on the country's stock markets. Their share prices have been on a steady climb as investors continue to be impressed with their performance. At the time of going to press, Shih Wei's stock was trading at a 52-week record high of TWD 66.40 per share.
published: 13 June 2008 << excerpt from TradeWinds >>