Yang Ming sinks deeper into red
Date: Monday, August 13, 2018
Source: American Shipper
Yang Ming’s net loss sank deeper into the red in the second quarter and first half of 2018 compared to the corresponding periods in 2017 as the Taiwanese ocean carrier battled headwinds from higher bunker prices, lower spot rates and oversupply across the shipping industry.
For the second quarter of 2018, Yang Ming recorded a net loss of 3.8 billion New Taiwan Dollars (U.S. $129.1 million), compared to a net loss of NTD 445 million for last year’s second quarter. Consolidated revenues for the second quarter of 2018 totaled NTD 33.6 billion, an increase of 1.1 percent year-over-year, while volumes clocked in at 1.3 million TEUs, up 11.8 percent.
For the first half of 2018, Yang Ming posted a net loss of NTD 5.8 billion, compared to a net loss of NTD 1.34 billion for the corresponding 2017 period. Consolidated revenues for the first half of 2018 totaled NTD 64.6 billion, up 1.8 percent year-over-year, while volumes reached 2.5 million TEUs, up 10.3 percent.
Yang Ming said that unexpected fuel prices drove up operating costs in the first half of 2018, with the average fuel price for the first half of the year increasing about 25 percent from the corresponding 2017 period.
The company also said its vessels are taking advantage of slow steaming to reduce bunker consumption and harmful emissions.
In addition, the average freight rates for the first half of 2018 fell about 10 percent year-over-year, Yang Ming said.
“Second-half performance is expected to improve due to stronger peak season demand and less new tonnage being introduced to the market,” Yang Ming said. “With these circumstances, ocean freight rates may rise as a result.”
In general, it appears rates already are looking up, based off data from the Shanghai Shipping Exchange’s Shanghai Containerized Freight Index (SCFI) as well as Drewry’s World Container Index (WCI).
The SCFI, a composite of spot container rates from Shanghai to 13 regions around the world, stood at a reading of 893.88 Friday, up 0.4 percent from last week and up 1.8 percent from Aug. 11, 2017.
Additionally, the WCI — a composite of spot container rates on eight major routes to and from the U.S., Europe and Asia — stood a reading of $1,691.88 per FEU as of Thursday. Although this was down 0.3 percent from a week earlier, it was still up 13.2 percent from two weeks ago and up 7.9 percent from a year ago.
Looking ahead, Yang Ming has approved the construction of 10 2,800-TEU containerships, which will be deployed on the intra-Asia market. In addition, there are five 14,000-TEU chartered vessels scheduled for delivery beginning in the fourth quarter of this year, as well as 10 12,000-TEU chartered vessels that will be delivered in 2020 and 2021.
Yang Ming said its equity, strengthened by the injection of $343.5 million in capital and a $255 million secured convertible bond issued on May 25, together with its increased government-related ownership to 45 percent, will bolster its access to financing channels in Taiwan.
Yang Ming is a member of THE Alliance, which also consists of Hapag-Lloyd of Germany and Ocean Network Express, a container shipping joint venture between “K” Line, NYK and MOL.
Click here to read the entire article from the original source
Have the News Delivered to you
Like what you see here? Why not let us send it directly to you?
Sign up to receive our Weekly Industry Newsletter, a compilation of all news articles that matter to you and your business.