[161118.EN.BIZ] Yang Ming In The Red For US$30m in Q3

TAIWANESE shipping line Yang Ming suffered a third-quarter net loss of NTD0.91 billion (US$30 million), a reduction of 76.16 per cent compared to the second quarter.

The company posted third-quarter consolidated revenues of NTD38.72 billion (US$1.29 billion), representing growth of 15.23 per cent compared with the previous quarter. Container shipping volumes in Q3 rose by 9.19 per cent to 1.41 million TEU compared with the second quarter, a statement from the carrier said.

Year-to-date consolidated revenues were up by 4.12 per cent year on year to NTD103.35 billion on a volume increase of 11.35 per cent to 3.92 million TEU. The net loss for the first three quarters was NTD 6.67 billion.

"An unfavourable supply-demand balance with weakening freight rates and escalating bunker prices, which rose 28.38 per cent in the first nine months year over year, contributed more than NTD4 billion (US$34 million) to carriers' operating costs," the company said.

"Anticipated for the next quarter, the escalating trade war is likely to accelerate Chinese exports to the US and therefore freight rates and loading factors should improve for the Transpacific sector," it added.

In the Asia Europe sector, the carrier said it expects to see improving rates and volumes as factories resume production following China's Golden week holiday in October.

Considering these factors, Yang Ming said its outlook for Q4 is "optimistic", highlighting that Alphaliner predicts global container throughput will increase by 4.3 per cent next year, exceeding forecasted capacity growth of 3.9 per cent.

Responding to many uncertainties faced by global shipping throughout 2018, the company said it has made "adjustments to strengthen its strategies. Taking advantage of opportunities in the fast-growing economies in Southeast Asia, the company will optimise its Intra-Asia service network."

Concurrently, Yang Ming's subsidiary, YES Logistics Corp, established joint ventures in Vietnam and Indonesia earlier this year to better integrate its logistics supply chain in the region, while Yang Ming continues to cooperate with other transportation related enterprises to "seize upon investment opportunities in the ASEAN countries," it said.

Partnering with Taiwan International Ports Corporation (TIPC) and Indonesian investors, Yang Ming established a depot in Surabaya, Indonesia under the joint venture, PT Formosa Sejati Logistics, this May.

The carrier also collaborated with TIPC and other transportation enterprises such as T S Lines Co, Taiwan Navigation Co and Chunghwa Post Co to set up Taiwan Foundation International Pte, a joint venture holding company intended to "deepen and extend into the Southeast Asia market," it said.

"Through these cooperatives Yang Ming endeavours to improve its cost structure, maximise investment revenue and profits and effectively navigate the continuing challenges and risks facing the shipping industry," the statement said.

The company added that it will introduce four 14,000 TEU chartered vessels to its fleet and return seven higher-cost chartered vessels next year.

Source : HKSG.