Results were better than expected, and the company points to a forecast of improving supply-demand balance in container shipping.
Yang Ming reported “better-than-expected” results for the first quarter of 2019.
The Taiwanese carrier said it had a net loss after tax of $22 million in the first quarter of 2019, about a third of the $67 million loss it reported in the first quarter of 2018.
The company had first-quarter revenue of $1.14 billion, 13% more than in the same period last year.
The Taiwanese carrier, which is part of THE Alliance along with Hapag-Lloyd and Ocean Network Express, said it carried 1.29 million TEUs in the first quarter, up 5% year-over-year.
Yang Ming said the improvement came despite the traditional slack season in the first quarter and rising operating costs resulting from an 11% increase in oil bunker prices.
Yang Ming cited a forecast from the information provider Alphaliner that it said shows supply in the container shipping industry growing 3.1% and being outstripped by 3.6% growth in demand.
“This prediction signals an improving supply-demand market. With a brighter outlook, Yang Ming continues to adapt to market changes and adjust operating strategies in line with the direction of the market. As illustration, Yang Ming’s fleet of new eco-friendly vessels is well prepared to meet with the upcoming IMO (International Maritime Organization) 2020 low-sulfur regulations. The company’s fleet optimization plan is another example of Yang Ming’s efforts to achieve its corporate social responsibility goals, while increase its cost-efficiency and competitiveness in the market.”
In December, Yang Ming outlined its plan to renew its fleet with a mix of owned and chartered ships in a presentation to analysts.
In 2019, it will take delivery of four 14,000-TEU chartered ships. In 2020 and 2021, it plans to take delivery of 10 owned ships with 2,800-TEU capacity and 10 chartered ships of 11,000-TEU capacity.
It also said between 2018 and 2020 it will see 18 charters expire — 12 4,250-TEU ships and six 8,000-TEU ships — resulting in savings of about $50 million.
Yang Ming also said it will form a new subsidiary with partners in Jakarta named PT Yang Ming Shipping Indonesia, noting that Indonesia has the largest economy in Southeast Asia. Benson Chou has been nominated as president director.
It has upgraded service to the country by deploying larger vessels and increasing service frequencies. Yang Ming has a total of six services in the country — three that are self-owned and three that are joint services.
Those services call four major ports in Indonesia — Jakarta, Surabaya, Semarang and Belawan, and Yang Ming said there also are various transit options at Singapore and Port Klang that link Indonesia customers to Yang Ming’s long-haul services.
In addition to Jakara, PT Yang Ming Shipping Indonesia has branch offices in Surabaya, Panjang and Palembang.