Taiwan-based ocean shipping company Yang Ming Marine Transport Corporation reported net losses for the second quarter and first half of the year but added it has managed to lower its losses by over 60% compared to the previous year.
Yang Ming said it sustained a net loss in the second quarter of 2019 of NTD1.27 billion (US$40.99 million). This is even though consolidated revenues for the quarter went up 20.24% to NTD40.4 billion compared to the same period of the prior year. Business volumes also increased by 5% year-on-year to 1.35 million TEUs.
Net loss for the first half of the year is NTD1.95 billion. Consolidated revenues for the period rose by 16.77% compared to the same period in the previous year to NTD75.48 billion. Yang Ming said business volume increased 5% to 2.64 million TEUs.
The carrier explained that its earnings were affected by a number of factors. For one, the container shipping market remained under pressure due to an oversupply in capacity in the first half of the year. Global throughput is estimated to grow at 2.5% in 2019 while capacity is predicted to grow at 3.1%.
Further, market demand was weaker than expected with the ongoing U.S.-China trade conflict weighing on the global economy.
In addition, the slight rise in bunker fuel prices affected Yang Ming’s operating costs, while the new IFRS 16 accounting standard had a negative impact on its half-year profitability by around NTD0.6 billion.
“Consequently, the company’s operating performance was insufficient to yield profits in the first half of 2019,” the carrier said.
Nevertheless, it stated it has reduced its financial losses significantly by 66.22% as compared to the previous year, largely due to the result of its strategies implementation and cost control.
Furthermore, the Taiwan Ratings Corp. has affirmed a stable rating for Yang Ming’s outlook in the long term. This result reflects Yang Ming’s improved cost structure driven by its fleet optimization plan.
Since last year, Yang Ming has begun to deploy its new eco-type containerships while returning some of its higher cost chartered vessels. It said it will continue to enhance its competitiveness through its strategic fleet deployment, along with THE Alliance’s expanded partnership and future new service network.
Photo: tminusbraxton
