Yang Ming’s half-year financial results have been affected by container ship market pressures including bunker fuel prices – but it has reduced its financial losses ‘significantly’
Yang Ming’s consolidated revenues for Q2 2019 totalled US$1.3Bn up 20.24% compared to Q2 2018. Business volumes increased by 5% year-on-year to 1.35M TEU. Net loss for Q2 2019 was US$40.99M.
Yang Ming’s consolidated revenues for the first half of 2019 rose by 16.77% compared with the same period in the previous year to US$2.44Bn, with an increase in volumes of 5% to 2.64M TEU. The net loss for the first half year was US$62.94M.
Yang Ming cited analyst firm Alphaliner’s report, which said the container shipping market remains under pressure due to oversupply capacity in the first half year. Yang Ming said “According to its latest projection for 2019, global throughput is estimated to grow at 2.5% while capacity is predicted to grow at 3.1%. The market demand is weaker than expected since the ongoing US-China trade conflict has weighed on the global economy. In addition, the slight rise in bunker fuel prices affected Yang Ming’s operating costs”.
The carrier added in a statement “Furthermore, the exercise of the new IFRS 16 accounting standard had a negative impact on Yang Ming’s half-year profitability by around US$19.37M.” Consequently, the company’s operating performance was insufficient to yield profits in the first half of 2019.
But Yang Ming said 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 optimisation plan.
The ocean carrier added “Since last year, Yang Ming has begun deploying its new eco-type container ships while returning some of its higher-cost chartered vessels. Through its strategic fleet deployment along with THE Alliance’s expanded partnership and future new service network, Yang Ming will continue to enhance business competitiveness and provide global customers with more excellent and comprehensive service quality.”