Yang Ming Marine Transport Corp. reported Friday it had shaved its loss from more than $27 million in the first quarter to $2.25 million in the second.
Still, that means the Taiwanese carrier had a net loss for the first half of the year of nearly $29.5 million. During the first six months of 2020, consolidated revenue was down 12% compared to the same period in 2019, to $2.2 billion. Volume was down 9.86% to 2.38 million twenty-foot equivalent units (TEUs). And the first-half net figure included a loss in the dry bulk business of $30.53 million.
But Yang Ming said there were bright spots during the second quarter.
“Benefiting from strong freight rates and relatively low fuel costs, Yang Ming reported an improving quarterly result in its container transport business, generating positive operating profit of $18.64 million in the second quarter despite the business volumes [being] down 15% due to the COVID-19 outbreak,” it said.
But as with the first half, the dry bulk business brought down second-quarter results.
“In spite of the significant progress in [the] container transport sector, the spread of the pandemic had negatively impacted the dry bulk market, resulting in quarterly losses of $20.94 million for Yang Ming’s dry bulk business, primarily attributable to the recognition of impairment loss on dry bulk chartered-in vessels under [international financial reporting standards],” it said.
Yang Ming indicated in the six-paragraph earnings release that it believes the future is bright.
“Looking forward, [as] Western countries begin to lift social distancing measures and manufacturing productions resume operation, the trans-Pacific freight rates have surged to the highest level in two decades. The rates on Asia-Europe routes have also shown an improvement compared to the same period last year,” Yang Ming said.
Yang Ming said it also is taking steps to “efficiently control its operating costs, such as optimizing container flows to minimize container repositioning costs, feeder/inland transport and fuel consumption reduction, anticipating better performance in [the] container transport sector in the third quarter.”
It said it is accelerating its fleet optimization plan with the addition of 14 11,000-TEU chartered vessels and 10 2,800-TEU owned newbuilds. Yang Ming said these new, efficient vessels will reduce fuel costs while enhancing the company’s long-term competitiveness.
“In terms of dry bulk business strategies, Yang Ming will redeliver chartered tonnage, including three vessels by the second quarter of 2021 and the remaining four long-term chartered vessels during 2022 to 2025,” it said. “Furthermore, with charter rates on the rise and the Baltic Dry Index posting gains, the recovering market will significantly improve [the] dry bulk business’ performance after the third quarter.”
Friday’s earnings release was longer than the three-paragraph statement provided after the first quarter. In that statement in May, Yang Ming reported that “several [economic] stimulus or bailout [packages have] been revealed by the government to support the shipping industry as it weathers the pandemic impact.”
No mention of bailout packages was included in Friday’s press release.