Yang Ming Marine Transport Corporation reported a gross profit from operations of 1.16 billion new Taiwan dollars (or about $36.8 million U.S. at today’s exchange rate of about 31.5 NTD to 1 U.S. dollar) in the second quarter of 2019, compared to a 2.03 billion NTD loss in the same 2018 period.
The company’s net loss in the second quarter of this year was about 1.18 billion NTD, a sharp reduction of about 66% from the 3.73 billion NTD net loss reported in the second quarter of 2018.
Total operating revenue amounted to about 40.4 billion NTD in the second quarter of 2019, a 20% increase from the 33.6 billion NTD recorded in the second quarter of 2018. Revenue grew faster than cargo volumes: Yang Ming said it carried 1.35 million TEUs in the second quarter of 2019, 5% more than in the second quarter of 2018.
Yang Ming pointed to a report by the analyst firm Alphaliner that said the container shipping market was under pressure due to an oversupply capacity in the first half of the year. Alphaliner ranks Yang Ming as having the world’s eighth-largest containership fleet. Along with Hapag-Lloyd and Ocean Network Express (ONE), Yang Ming is a member of THE Alliance, a space-sharing agreement on major east-west container routes. Hyundai Merchant Marine is scheduled to join THE Alliance in April 2020.
Yang Ming said Alphaliner’s latest projection for 2019 is that global throughput will grow 2.5% while capacity is predicted to grow at a rate of 3.1%.
“The market demand is weaker than expected since the ongoing U.S.-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 company said the new IFRS 16 accounting standard had a negative impact on its half-year profitability by around NTD 0.6 billion ($19.37 million).
“Consequently, the company’s operating performance was insufficient to yield profits in the first half of 2019,” Yang Ming explained.
Yang Ming said it is optimizing its fleet and since last year has begun deploying “new eco-type containerships 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.”