Hsu Chih-Chien Interviews with Reuters

SINGAPORE, Sept 25 (Reuters) - Singapore-listed Courage Marine expects to post record results for this year, thanks to a boom in shipping freight rates, but the firm is cautious about expanding, its chairman told Reuters on Tuesday.

The shipping firm's Taiwan-based Chairman Hsu Chih-Chien said net profit for the second half of 2007 should be better than the $20 million posted for the first half, and it plans to spend $60 million to add three new ships within a year to its fleet.

"Sixty percent of our ships are based on spot rates, so we have enjoyed this boom to the absolute fullest," Hsu told Reuters in an interview on the sidelines of an industry conference in Singapore.
He said that China's infrastructure and construction boom would sustain a rally in freight rates in the next few years, and drive demand for the company's existing fleet of 10 bulk carriers, which transport mainly iron ore, coal and cement.

The Baltic Dry Index -- which charts rates for seaborne trade of commodities like iron ore, cement, and grains -- has hit regular record highs in the past month and more than doubled this year, lifted by China and India's roaring growth.

Courage Marine, which has a market cap of $274 million, reported a net profit of $20.1 million for the first half to June 2007, while full-year earnings for 2006 were $27.8 million.
"We have no debt and several lines of credit that we have not used, so there won't be a problem financing our fleet expansion," Hsu said.

The company competes with other operators of bulk carrier fleets like Pacific Basin Shipping Precious Shipping and Jinhui Shipping and Transportation

Despite its plans to buy three ships, Hsu said Courage Marine prefers to be more cautious than other shipping firms that have aggressively expanded their fleet this year.

"We have experienced the roller-coaster of the industry and how bad it can get in a downturn, so we prefer to be rather conservative in expansion," Hsu, 50, said.

Hsu said the company has a bigger risk appetite on the volatile spot market -- where ships are leased out on short terms of three months or less, and thus subject to frequent rate changes.
"To us, the spot market is gambling with loose change. Whereas if we make a mistake with a ship acquisition, we're gambling with big bills," Hsu said.

He added that the risks of being exposed to the spot market were mitigated by long-term relationships with some of its major customers, such as state-linked companies like China Coal Energy and Taiwan's Formosa Plastics.

Do you have something to say about him? We all know that most publications are edited many times before being released and so may not be a useful guage for a person's integrity, character e.t.c. This site seeks to uncover the REAL persona behind the facade, be it good or bad so that, Number 1, we hold them accountable. Number 2, the public can make informed decisions before investing money in their organisations. Having a good Management team is important in investing. Number 3, to know that there is still a side of them we may not know....