“An unfavorable supply-demand balance with weakening freight rates and escalating bunker prices” blamed for $134 million in carriers’ operating costs.
Yang Ming announced it had lessened its net loss in the third quarter.
Yang Ming reported a Q3 net loss after tax of NTD .91 billion (U.S. $30 million), a reduction of 76.16 percent compared to last quarter.
The company posted third-quarter consolidated revenues of NTD 38.72 billion (U.S. $1.29 billion), a growth of 15.23 percent compared with revenue from the previous quarter. Volumes in Q3 increased by 9.19 percent to 1.41 million TEUs compared with the second quarter, Yang Ming said.
The year-to-date consolidated revenues increased by 4.12 percent year-over-year to NTD 103.35 billion (U.S. $3.45 billion), a volume increase of 11.35 percent year-over-year to 3.92 million TEUs. The net loss after tax for the first three quarters was NTD 6.67 billion (U.S. $220 million).
“An unfavorable supply-demand balance with weakening freight rates and escalating bunker prices, which rose 28.38 percent in the first nine months year-over-year, contributed more than NTD 4 billion (U.S. $134 million) to carriers’ operating costs,” Yang Ming said in its Q3 report. “Anticipated for the next quarter, the escalating trade war is likely to accelerate Chinese exports to the U.S. and, therefore, freight rates and loading factors should improve for the transpacific sector.
Yang Ming said it also expects to see improving rates and volumes in the Asia-Europe sector as factories resume production following the October China Golden Week.
“Considering these factors, Yang Ming’s outlook for Q4 is optimistic,” the company said.
Going forward into next year, Alphaliner’s latest projection predicts an increase of 4.3 percent in global throughput, which will exceed forecast capacity growth of 3.9 percent.
“Responding to many uncertainties faced by global shipping throughout 2018, Yang Ming has made adjustments to strengthen its strategies,” the company said. “Taking advantage of opportunities in the fast-growing economies in Southeast Asia, the company will optimize 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 Ltd. (TIPC) and Indonesian investors, Yang Ming established a depot in Surabaya, Indonesia, under the joint venture, P T. FORMOSA SEJATI LOGISTICS, in May. Yang Ming also collaborated with TIPC and other transportation enterprises such as T.S. Lines Co. Ltd., Taiwan Navigation Co. Ltd. and Chunghwa Post Co. Ltd., to establish Taiwan Foundation International Pte. Ltd., a joint venture holding company intended to deepen and extend into the Southeast Asia market, the company said.
“Through these cooperatives, Yang Ming endeavors to improve its cost structure, maximize investment revenue and profits and effectively navigate the continuing challenges and risks facing the shipping industry,” the company said.
Yang Ming added that it will introduce four 14,000-TEU chartered vessels and return seven higher-cost chartered vessels in 2019.
Yang Ming reduces loss in third quarter
