Evergreen net profit up 59 percent after strong China trade in fourth quarter

Taiwan's Evergreen Marine Corp, the world's third largest container shipper, posted a 59 percent rise in quarter earnings after a rise in freight rates and strong China exports. Evergreen said it is confident it will continue to enjoy profit growth this year, despite analysts' forecasts for a drop in earnings due to increasing global container capacity putting pressure on freight rates.
Evergreen said the additional capacity will not hurt freight rates until the second half of 2006.
"This year should be better than last year as the market growth should be higher than capacity growth," said company spokesman K.W. Nieh. Evergreen earned a net profit of T$2.78 billion ($87.5 million) in the October to December period of 2004, up from T$1.75 billion a year earlier, according to Reuters calculations based on the company's full-year results.
"Exports from China is the main reason, while the American market is also still going strong," said Nieh.
However, earnings slipped from T$4.34 billion in the third quarter.
The shipping firm, which derives 60 percent of revenue from the Asia-US route, reported a full-year 2004 net profit of T$11.73 billion, beating the T$10.8 billion average forecast from seven analysts surveyed by Reuters Estimates.
Analysts forecast profit to fall to T$9.74 billion in 2005.
Evergreen Chairman Chang Kuo-cheng told Reuters in an interview last week he expected demand to outpace container supply by 3 percent this year, and port congestion will push down real supply, keeping freight rates high.
He also said load factors on US routes are already full in January, while European routes are nearing maximum - a condition not seen during the same period last year.
Chang said the Evergreen Group was eyeing investments in air cargo terminals and seaports in China to take advantage of the country's booming trade.
The results came after the Taipei stock market closed on Monday, when Evergreen's shares ended up 5.56 percent at T$30.40, outperforming a 1.94 percent rise on the broader market.
The issue rose 15 percent in 2004, outpacing a 4.2 percent rise by the broader market, as investors sought shipping stocks amid strong exports from China.