CSBC optimistic about growth in 2013 as prices rise

CSBC Corp, Taiwan, the nation’s biggest shipbuilder, expects the industry’s growth momentum to rebound in 2013 on the back of higher prices, a company official said yesterday.

“Although the shipbuilding sector’s current growth momentum remains at a low level, from my perspective, the situation might change in 2013,” CSBC chairman Paul Tang told reporters after the company’s annual shareholders meeting.
Demand for ships might rise gradually next year, driving up prices and leading to robust growth in the sector in 2013, Tang said.
In addition, Tang said some shipbuilders might quit the market by the end of next year, allowing orders to be transferred to the remaining companies, such as CSBC.
CSBC has a total of 45 ships currently on order and to help make it through the economic downturn, the firm has been focusing additional resources on ship design in an effort to attract new orders, he added.
Last month, the Kaohsiung-based shipbuilder won a bid from Evergreen Group to build 10 container vessels for US$1.03 billion. Delivery of these vessels is set to begin in the fall of 2013 or earlier, CSBC said on May 20.
CSBC remained tight-lipped yesterday about the potential earnings the Evergreen order might generate.
At yesterday’s meeting, shareholders approved a plan to provide a cash dividend of NT$1.8 per common share based on last year’s net income of NT$1.7 billion (US$59.01 million), or NT$2.36 per share, according to a company statement filed with the Taiwan Stock Exchange.
However, shareholders issued three requests to CSBC officials: That the company should earn more than the current conservative guidance, decrease this year’s dividend to maintain more cash to boost development and raise wages for employees.
CSBC said in February that it expected revenues would total NT$29.42 billion this year, up 12.4 percent from a year ago. Full-year profits are expected to reach NT$1.41 billion, or NT$1.94 per share, the company said.
Tang said yesterday the company’s conservative guidance was made on the back of their lack of economic scale, insufficient support from periphery industries and less government attention on the shipbuilding sector.
Nevertheless, he said the company’s profitability this year would still depend on shipbuilding prices, supply and demand conditions, as well as the exchange value of the New Taiwan dollar.
Shares of CSBC fell 0.68 percent to NT$29 yesterday on the local stock exchange.