Taiwan Airlines' gross profit increased, profit in the first three quarters increased by 15% year-on-year, EPS 2.72 yuan

Taiwan Airlines' profit in the first three quarters increased by 15% year-on-year, with EPS of 2.72 yuan. (Extracted from official website)

[Reporter Wang Yihong/Taipei Report] The consolidated revenue of bulk shipping Taiwan Airlines (2617) in the first three quarters was 3.722 billion yuan, an annual increase of 19%, and the gross profit margin increased from 40% in the same period last year to 45%, showing that revenue growth also led to an increase in profitability. The after-tax net profit was 1.134 billion yuan, an annual increase of 15%, and the earnings per share (EPS) reached 2.72 yuan, which was better than the 2.36 yuan in the same period last year.

Looking forward to the market outlook, Taiwan Airlines pointed out that according to the latest report released by the IMF in October 2026, the global economic growth rate is estimated to be approximately 3.1% in 2026, and is expected to rebound to 3.4% in 2027. However, the global economy still faces risks such as geopolitical conflicts, trade policy uncertainty, and inflation. China is still an important source of demand for the global dry bulk shipping market. However, due to the downturn in the real estate market and the adjustment of steel industry demand and output, the growth space of iron ore imports is still uncertain. In addition, the new iron ore mining area in Guinea, West Africa, is gradually being put into export. Coupled with the continued increase in bauxite exports, long-distance transportation demand is expected to support the capesize ship market. In terms of small and medium-sized ships, India's coal import demand, South American grain exports and intra-Asian industrial raw material transportation are still the main focus of observation; in addition, China's coal import policy and US-China trade relations will also affect the subsequent performance of the Panamax and lightweight ship markets.

On the supply side, Taiwan Airlines pointed out that the net growth rate of the overall fleet in 2026 is estimated to be about 4.1%, which is slightly higher than the average in previous years. Among them, the delivery of new capesize ships is still relatively limited, while the delivery of Panamax and small and medium-sized ships is larger. Although the increase in overall effective shipping capacity is slightly higher than the previous average, the increase in tonnage supply is offset by the adjustment of ship locations due to geopolitical conflicts.

Taiwan Airlines said that for its fleet of medium and small ships, China's imports of U.S. soybeans and other agricultural products have continued this year, and grain exports from Brazil and Argentina have continued to boom, effectively driving demand for Panamax and light extreme ships. In addition, Asian countries have increased demand for coal for power generation due to the Year of the Holy Infant, which has benefited the freight rates of these two ship types.

In recent years, Taiwan Airlines has continued to promote the fleet replacement plan. Two new 40,000-dwt bulk ships ordered in early 2024 were delivered for operation in the second quarter of this year. The current average age of Taiwan Airlines’ bulk fleet is about 6 years old. Two new bulk ships of 64,000 deadweight tons ordered in early 2025 are expected to be delivered in the third and fourth quarter of 2028. Taiwan Airlines will carefully evaluate whether to dispose of older ships based on the global bulk shipping market trends, changes in ship supply and demand, and the development of international energy conservation and carbon reduction policies, and will consider launching a new shipbuilding plan to optimize the fleet and strengthen the company's overall operational competitiveness.

Taiwan Airlines said that the performance of the global dry bulk shipping market in the first three quarters was better than expected at the beginning of the year. In the first half of the year, freight rates showed a steady off-season. In the third quarter, benefiting from the increase in exports of major minerals and the geopolitical situation in the Middle East, the freight rates of capesize vessels rose sharply. The BDI once climbed to 3,628 points in early September, a high in recent years. Although market freight rates have fallen back since October, the overall freight performance is still higher than the same period last year. Coupled with the increase in long-distance cargo loads, tight supply of effective shipping capacity, stable market fundamentals, and the disruption of ship operations caused by the war in the Middle East, adjusting locations to lengthen cargo voyages consumes a large amount of ship tonnage supply. In addition, factors such as the long-distance transportation of bauxite and iron ore exported from Guinea, West Africa to China, which effectively increases the tonnage demand of capesize ships, are the reasons for the growth in freight rates so far this year.