裕民航運召開2018股東常會

　　裕民航運於6月6日假臺北國軍英雄館召開2018年度股東常會，由徐旭東董事長親自主持，會中除報告公司2017年度之營運狀況，亦通過財務報表及盈餘分配等議案。2017年，全年合併營收為新臺幣（以下同）8,501,325仟元，稅後盈餘為999,520仟元，稅後基本每股盈餘（EPS）為1.18元。會中通過發放現金股利每股1.2元，仍維持高度盈餘發放比例及高現金股息殖利率，此外裕民帳上保留未分配盈餘及可供分配法定盈餘公積合計為100.48億元，達每股11.89元，可供未來年度盈餘股利之分配。

航運景氣與市場供需
　　2017年，由於世界經濟進入復甦期、市場需求增加、新造船速度放緩等因素，海運市場一掃前一年的陰霾，從下半年開始，波羅的海乾散貨指數（BDI）一路走高，在12月中旬，創下四年來的新高1743點。整年平均指數，與2016年相比，漲幅超過70%，2018年第一季平均1,173點，亦較去年同期成長24%。根據國際貨幣基金組織（International Monetary Fund, IMF）預估，2017年全球GDP約為3.6%，高於2016年的3.2%，IMF也預估全球經濟延續2017年的成長動能，2018及2019年均將成長3.9%。其中中國表現優於預期，2017年GDP增長6.9%，2018年第一季GDP年增率為6.8%，此波景氣回暖，為航運需求帶來好消息。

　　繼工業化之後，城市化成為中國經濟發展的新主軸。2017年中國持續加速房地產去庫存，房地產開發帶動鋼鐵需求，粗鋼產量達845百萬噸，年成長約4.7%，佔全球產量50%。2018年第一季生產210.8百萬噸鋼鐵，較去年同期成長5%，再創歷史新高。受到房地產調控及經濟轉型影響，預計中國鋼鐵消費及產量增長將稍許減緩。然而，中國持續執行「淘汰落後產能」、「去空汙除霾害」、「節能減排」等政策，帶動了高品位鐵礦砂的進口需求，2017年進口1,074.7百萬噸鐵礦砂，創下歷史新高，預計中國依賴進口鐵礦砂的比例將穩定維持在83%左右。另外東協市場因受惠於中國「一帶一路」，在2017年整體區域平均的GDP自2016年的4.8%上升至2017年的5.1%，遠高於全球市場。經濟發展刺激大量能源需求，煤礦因價格低廉，仍為新興國家首選。國際能源署（IEA）與能源顧問公司Wood Mackenzie皆預估，東協國家及印度將取代中國，引領未來數十年的全球煤礦需求。

　　船舶供給方面，2017年仍是供給過剩的狀況，截至2018年5月，散裝船隊總計826百萬DWT，年成長約2%，呈現緩步成長，新船訂單佔整體船隊不到一成，船隊供給增長來到歷史低點，有助於航運市場持續復甦。目前15年以上老舊船舶佔整體船隊14%，略高於新船訂單佔比。國際海事組織規定2019年9月開始強制實施設置壓艙水處理系統，「0.5%低硫油公約」將於2020年1月正式實施，國際環保法規將加重船東營運成本，可望加速老舊船拆解，進一步改善市場供需狀況。

擴展業務與綠色航運
　　在擴展核心業務方面，裕民於2018年初與全球最大鐵礦石生產商巴西淡水河谷 Vale International SA of Switzerland公司簽訂25年鐵礦石長期運送合約，此為裕民成立以來所簽訂的最重大長期合約，將自2020年起承運巴西出口至中國的鐵礦石運輸業務至2045年，預計合約總收入可達美金6億元以上，除此之外此合約關係間接使裕民與Vale現貨市場交易更加熱絡，有助於裕民開拓巴西至中國的長航線運務市場。另外為深耕中國市場，於今年初與廈門國貿集團公司(ITG)成立了兩家合資公司，預期加速拓展業務帶來獲利。

　　裕民領先業界，加入澳洲與中國大陸之間鐵礦石和煤礦貿易的「綠色走廊」跨國計畫。與澳洲主要礦商必和必拓(BHP Billiton)、力拓集團(Rio Tinto)、FMG集團、船東商船三井(MOL)、挪威船級社(DNV GL)、伍德賽德能源公司(Woodside Energy)及上海船舶研究設計院(SDARI)，共同研究建造液化天然氣(LNG)及燃油雙燃料動力海岬型散裝貨輪(Newcastlemax)。目前已發表有210,000 DWT雙燃料礦砂原型設計船，準備用於運送西澳到中國鐵礦砂運務，該型船符合環保節能減排綠色航運特點。另外配合與巴西淡水河谷25年運務合約所訂造的兩艘32.5萬噸的超大型礦砂船(VLOC)，也加入改裝LNG燃料彈性設計，未來將可改裝為LNG燃料船。LNG是一種乾淨、高效能的燃料，對環境更為友善。

智慧管理與企業社會責任
　　裕民積極再造船舶管理模式，從2016年起導入端到端的船聯網，提供即時的船舶資訊、船隻位置與動態，並監控船舶航行速度，管控燃料消耗量。此不僅增加岸上對船上的能見度，並支援流程自動化，改善船隊管理效率，將有助於船隊管理轉型。另外，為落實船隊安全、降低重大海事風險，成立專職「船隊安全紀律訪察小組」（Safety Discipline Officer Team，簡稱SDO），登輪實地訪察，與船上船員充分溝通，宣導各項安全規定，經由缺失的發掘與改善，形成船隊的安全文化。今年，因船舶安全紀律稽核的執行，事故傷害率比往年大幅降低。

　　裕民航運長期致力於永續經營，榮獲國內外的肯定。2017年再次獲得臺灣永續能源研究基金會《臺灣企業永續獎》運輸業銀獎殊榮。同時也通過評鑑並納入英國《富時社會責任新興市場指數FTSE4Good Emerging Index》及《臺灣永續指數FTSE4Good TIP Taiwan ESG Index》成分股，這都肯定了裕民於環境保護、企業社會責任和公司治理執行的表現。＃

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Optimizing and Modernizing U-Ming:
Digitalizing Operations and Expanding Core Business

1) Business Performance
U-Ming Marine Transport Corporation has convened its 2018 Annual Shareholders’ Meeting (AGM) at the Taipei Hero House on June 6, 2018; hosted by its Chairman, Mr Douglas Hsu. During the AGM, Mr Hsu presented the Company’s 2017 Business Report; and motions such as Adoption of the 2017 Financial Statements and the Proposal for Earnings Distribution of 2017 etc. were passed. For 2017 operating performance, the Company’s consolidated revenue amounted to NT$8.501 billion; net profit was NT$0.999 billion and the earnings per share (after-tax) was NT$1.18. The motion to cash dividends of NT$1.20 per share to reward the shareholders was passed. The Company has always been maintaining a sound financial structure of which the retained undistributed earnings and the statutory surplus reserve available for distribution as future annual earnings dividends amounted to NT$10.048 billion; equivalent to NT$11.89 per share. U-Ming will continue to create shareholders’ value to reward its shareholders.

2) Market Outlook
The shipping market in 2017 was relatively better compared with the previous year as a result of the global economic recovery, the increase in demand, the downshifting of the new shipbuilding, etc. The Baltic Dry Index (BDI) rose to a new high in four years at 1,743 points around mid-December. Overall, the 2017 average index rose over 70% compared to last year as a result of the global economic recovery; coupled by the increased market demand and the slowing down of newbuilding deliveries. The average BDI in Q1 2018 was 1,173 points, a 24% growth compared to the same period in 2017.

According to International Monetary Fund (IMF), the 2017 global GDP was around 3.6% which was better than the 3.2% in 2016. IMF also forecasted the global economy will continue its growth momentum in 2018 and 2019 by 3.9%; among them, China will perform better than expected. China’s GDP growth for 2017 was 6.9% and its Q1 2018 growth rate was 6.8%. This expected economic recovery is obviously good news to the maritime industry.

Following the reformed industrialization, China’s urbanization has become the primary cores for its future economic growth. China continued to accelerate real estate destocking in 2017 driven an accelerating demand for steel. In 2017, China’s annual crude steel output reached 845 million tons, a growth of about 4.7%, contributed to about 50% of the global crude steel production. China’s steel production had increased by 5% YoY in the first quarter of 2018 which was a record high of 210.8 million tons. Despite the expectation of the slowing down of China’s steel consumption and output growth due to the new real estate regulation and economic restructuring, the continued implementation of various government policies like the Backward Capacity Elimination, the Air Pollution & Smog Hazard Removal and the Energy Conservation & Emissions Reduction, China’s import demand for high-quality iron ore had been increasing as shown by the annual import volume of 1,074.7 billion tons, thus invigorating the international trade. It is expected that China’s dependence on imported iron ore will remain stable at around 83%.

Benefitting from China’s “One Belt, One Road” initiative, the overall ASEAN market was also in the expansion mode in 2017; which resulted an average GDP growth from 4.8% in 2016 to 5.1% in 2017, far above the global market. Economic development stimulates higher energy demand, and coal has become the first choice for emerging countries due to its relative low prices. According to the International Energy Agency (IEA) and energy consultant Wood Mackenzie, the coal demand in ASEAN countries and India will surpass that of China in the next few decades.

On the supply side, the over-tonnage situation still persisted in 2017. As of May 2018, the total dry bulk capacity is 826 million dwt but the fleet growth was at a slower pace of 2.0%. The new bulk carriers’ ordering is less than 10% of the total current fleet and the over 15-year old bulk carriers constituted about 14% of the total current fleet, thus surpassing the new building growth. The forthcoming Ballast Water Management Convention’s implementation in September 2019; together with the January 2020’s 0.5% Sulphur Cap regulation are expected to burden owner’s operating expenses thus resulting an expected faster pace in ship demolition activities which will in turn stabilize the over-tonnage situation.

3) Core Business Expansion and Green Shipping Initiatives
In January 2018, U-Ming has signed a 25-year Contract of Affreightment (COA) with Vale International SA of Switzerland for the transportation of Brazilian iron ore to China; commencing in 2020 till 2045. The COA is the biggest and longest commitment in U-Ming’s history and the total contract value is anticipated to be more than US$600 million. This contract will also enhance U-Ming’s spot cargo business relationship with Vale and strengthen the company’s presence in the Brazil-China long-haul freight market. To enhance our involvement in the Chinese market, the company has also signed an MOU with ITG Xiamen in September 2017 to the eventual set-up of the two joint venture companies in early 2018 to leverage on the respective company’s cargo base and shipping expertise.

In response to the IMO’s 0.5% sulphur cap regulation to be effect on 1 January 2020 and the commitment for greener shipping, U-Ming has participated in the Australia-China’s “Green Corridor” project with the leading mining companies like BHP, Rio Tinto and FMG; together with MOL, DNV-GL, Woodside Energy and SDARI to jointly develop a dual-fuel (LNG/Fuel-oil) 210,000 dwt Newcastlemax bulk carrier specification - an alternative to the conventional fuel-oil engines. This is in preparation for the company’s future Australia-China’s iron ore trading route and to better service its customers. Besides, the 2 x 325,000 dwt VLOC (Very Large Ore Carrier) that the company has ordered for the Vale’s 25-year contract, are designed for LNG-ready purpose thus have the flexibility in switching to LNG fuel.

4) SMART Management and CSR
In 2016, the company has collaborated with Ericsson to optimize the vessels’ management system. The point-to-point internet link between ships was implemented to provide real-time information on vessels’ locations, movements and speed & fuel consumption. The system can also enhance the onshore visibility of vessels to support automation process and to minimize human intervention thus raising fleet management efficiency.

The risk exposure to accidents and casualty is high in the marine industry, thus the company has set up the Safety Discipline Officer Team (SDO). Its purpose is to audit and to cultivate safety culture onboard our ships. With enhanced communication onboard regarding ship operating procedures, maintenance and case studies’ learning, there has been a marked improvement in terms of deficiency detections and fleet safety record in 2017.

U-Ming has won many recognitions both at home and abroad for its continuing pursuit of sustainable development; one of those was the Silver Award in the logistics category at the 2017 Taiwan’s Corporate Sustainability Awards organized by the Taiwan Institute for Sustainable Energy. The company has also passed the evaluation of FTSE Russell and Taiwan Stock Exchange’s criteria to be a constituent the FTSE4Good Emerging Index and the FTSE4Good TIP Taiwan ESG Index. These achievements have indeed proven the company’s outstanding performance in the environmental, social, and governance initiatives.

5) Fleet Overview
U-Ming’s core business is in dry bulk shipping sector which currently owns and operates Capesize, Panamax, Post-Panamax, Supramax, Ultramax, Cement Carriers, Very Large Crude Carriers (VLCC) and Very Large Ore Carriers (VLOC), amounting to a total of 48 vessels (including vessels that are in operation, under construction, joint ventures and ship management service); with a total deadweight of 6.66 million tons. The company has its subsidiaries in Singapore, Hong Kong and Xiamen, China.#