CONTACT US

Send us a message

* Please fill in the form below.
Yang Ming losses continue to mount after 2016 revenue slump

Yang Ming losses continue to mount after 2016 revenue slump

Taiwanese ocean carrier Yang Ming has added a 2016 US$492m loss to the net deficit of $258m the previous year.

 

Revenue plunged to TWD115.4bn, from TWD127.6bn in 2015.

 

Lars Jensen, chief executive and partner at SeaIntelligence Consulting, today described Yang Ming’s financial performance as “very negative”.

 

Although all deepsea carriers had suffered a “bad year” in 2016, Mr Jensen said Yang Ming’s result compared unfavourably with its peers.

 

“To put the result into perspective, Maersk Line lost $384m and CMA CGM lost $452m. But it should be noted that CMA CGM is almost four times larger than Yang Ming in terms of capacity and Maersk Line is almost six times larger.”

 

Hapag-Lloyd, approximately twice the size of Yang Ming, had “only” lost $103m in the same period, he added.

“It is clear that major changes must be implemented in Yang Ming if the recapitalisation plan is to be more than temporary salvation in the face of competition from the very large carriers,” said Mr Jensen.

 

In January, Yang Ming sought to reassure customers and suppliers of its solvency after being identified by Drewry Financial Research Services (DFRS) as a “red flag risk”.

 

A research paper published by DFRS suggested that Yang Ming, the world’s eighth-largest carrier, had “taken the slot left vacant by Hanjin Shipping” as “the company with the most leveraged balance sheet in the industry”.

 

However, the carrier published a robust response and said: “Yang Ming has never approached its creditors with any demands to restructure any part of its debt, and has no intention to do so going forward.”

it continued: “Yang Ming has never failed to deliver in difficult times, even in the wake of the largest carrier bankruptcy.”

It advised that it was to raise $54.4m through a privately placed rights issue with six Taiwanese investors, including the state-owned National Development Fund of Taiwan. This increased government-owned stock to 36.6%.

 

Yang Ming alluded to a bigger stake being held by the Taiwan government as being part of “the company’s financial recovery plan”.

 

In November the Ministry of Transportation and Communications created a $1.9bn fund, available to the country’s shipping groups in case of financial hardship.

 

Since then, in an attempt to cut overheads and help make the container line more competitive, Yang Ming has slashed the pay of its senior executives by 50% and the salary of its line managers by up to 30%.

 

But shippers remain nervous after the sudden crash of Hanjin Shipping last year – not least because that carrier’s biggest creditor was also a state-owned bank. Indeed, several shippers have told The Loadstar  they had decided not to book with Yang Ming, due to its perceived dire financial position.

 

Nonetheless, Yang Ming will now need to regroup again as it prepares its exit from the CKYE alliance to join THE Alliance from Saturday.

 

THE Alliance has set up an independently managed trust fund to safeguard cargo operations should a member go bankrupt. It said customers had shown “a clear demand for such a safety net”.

 

 

Source: Loadstar 

Subscribe to our mailing list

* indicates required

OTHER NEWS

  • Rotterdam’s Box Volumes Continue Growing
  • Panama Canal Ends FY17 with Record Annual Cargo Tonnage
  • 2020 Sulphur Cap: Maersk Is Not on the Scrubber Team
  • Gloomy outlook for liner shipping as container rates continue to slide
  • Russia Setting Up Direct Shipping Line to Syria
  • Storm Wreaks Havoc in Port of Durban - Container Ship Blocked Port
  • CMA CGM: Indian Sub-continent Service Enhancement
  • Container rates still on the slide as Asia-Europe peak season 'fizzles out'
  • CMA CGM to increase its South Pacific footprint with acquisition of Sofrana Unilines
  • Are Chinese Banks New Source of Capital for Shipping?
  • Panama Canal Authority to Allow Booking Slot Swaps Among Alliance Members
  • Euroseas, Poseidon Eye Merger of Container Fleets
  • Norway Sets Up Second Test Area for Unmanned Ships
  • Hapag-Lloyd fleet 'now complete' as latest UASC newbuild ULCV is delivered
  • The SCFI recorded a fall of 4.6 percent for Asia- North Europe spot rates.
  • SeaIntel: Cascading of Larger Ships Hurting Asia-ECSA Rates
  • MSC Turns to DSME for 22,000 TEU Megaships
  • Latest ULCV orders the start of a slippery slope to new overcapacity glut?
  • SeaIntel: Q2 Results Paint a Better Picture for Container Carriers
  • Shipping in Changing Climates
  • Second hand Containership Sales at Record Level
  • More rate slippage on east-west trades as carriers prepare for slack season
  • Maersk credit rating downgrade threats are a red herring, argues financial analyst
  • SASAC Gives Green Light to COSCO-OOCL Deal
  • Carriers prepare for the slack season by blanking Asia-Europe sailings
  • Cntracking was at the 86th Izmir International Fair
  • Milaha has announced the launch of the first direct reefer service between Qatar and Turkey.
  • OOCL celebrates arrival of sister to the world's biggest containership
  • Drewry: Asia-Southern Africa Rates at 7-Year High
  • We hereby sincerely invite you to visit our booth at 86th Izmir International Fair
  • Merdan Erdoğan appointed CEO of www.cntracking.com
  • Hong Kong secures its shipping hub status with nod to vessel-sharing agreements
  • EU trade agreement creates healthy tailwind for Japan's ONE group
  • CMA CGM ULCV order could send ripples across tradelanes as rates strengthen
  • Top Carriers More Reliable in Q2
  • CMA CGM will launch new service linking Black Sea to Morocco and Algeria
  • MOL Delivers Stronger Quarter, Raises Outlook
  • Container spot rates on the rise, from Asia to the US, and Asia to Europe
  • Cosco acquisition of OOCL still faces “a degree of uncertainty”
  • ULCVs to Almost Double Capacity Share on Asia-North Europe by 2018
  • Soft Asia-Europe spot rates will harden as peak season approaches
  • Maersk still feeling effects of cyber attack
  • The negotiations for trade arrangements between the US and China have been concluded
  • CMA CGM, SEATRADE Enter Vessel Sharing Deal
  • More bigger ships set to put more pressure on Asia-Mediterranean container trade
  • Diana Containerships Ties Boxship Duo with Maersk, CMA CGM
  • WSC: Number of Containers Lost at Sea Drops
  • Cosco buys OOCL for USD 6.3 billion
  • Japan’s Trio Sets Up Container Shipping JV
  • Yildirim to Sell CMA CGM Stake as Plans to Buy Ports America
  • Hapag-Lloyd Ups Volume of Euro Bond Offering
  • Japanese carrier trio miss first target for ONE merger, but it's all 'going to plan'
  • CMA CGM sells 90 pct stake in L.A. container terminal for $817 mln
  • Maersk Claims Victory Over Cyber Attack
  • Cyber attack victims Maersk and TNT find ways to keep customers' cargo moving
  • Maersk Cyber Attack: Will Ocean Freight Rates Increase ?
  • Maersk suffers a cyber attack causing IT systems to fail
  • Wan Hai Boosts China-Vietnam-Thailand Links
  • South Africa rejects Japanese container line merger proposal
  • ZIM must plot a course through some choppy financial waters
  • Fitch: Boxship Rates Rise, Capacity Still Key
  • Transpacific rates still under pressure but Asia-Europe space still tight
  • MSC prepares contingency plan for cargo aboard Rickmers charters
  • Imabari Launches 20,150 TEU MOL Boxship
  • Maersk Line Not Accepting Cargo to/from Qatari Ports
  • Hapag-Lloyd becomes latest carrier to bring in container booking cancellation fee
  • Middle East air freight disruption looms as Qatar is blacklisted over 'terror links'
  • Japanese liner shipping trio becomes ONE, ready for launch next spring
  • FMC Discusses Regulatory Reform Initiative and Ocean Carrier Alliances
  • China-Europe rail boom as forwarders latch on to cost advantage for customers
  • Hapag-Lloyd finally completes merger with UASC
  • APL turnaround brings significant boost to CMA CGM first-quarter results
  • Uber Freight officially parks in the marketplace, but only taking full loads
  • China Sparks World Container Traffic Boom
  • Navios Containers Eyes USD 75 Mn for Rickmers Fleet
  • Shippers squeezing margins 'pushed carriers toward bigger ships and alliances'
  • Crane Falls at Jebel Ali Port after Boxship Collision, No Fatalities
  • Nerves jangle as shippers and forwarders wait to hear who is bankrolling Yang Ming
  • Future Management of Hamburg Süd Unveiled
  • Shock for Japanese shipping lines as merger plan is rejected by US FMC
  • Yang Ming Expects 2nd Stage of Recapitalization by June
  • targets 3% growth as next-generation Triple-Es start to arrive
  • Sharp Decline in Idling Boxships
  • APL Enhances China-Indonesia Coverage
  • Yang Ming Halts Share Trading
  • Shanghai port, world's busiest, grapples with traffic congestion
  • Drewry: Bigger Ships to Continue Pressuring Freight Rates
  • Alibaba extends partnership with KN to cover cross-border B2B shipments
  • Seago Line Sees Modest Profit amid Lower Freight Rates
  • ZIM, MSC Upgrade North Europe Express Service
  • DHL Says Ocean Freight Rates Have Reached Turning Point
  • CMA CGM Strengthening EURAF 5 Services
  • OCEAN Alliance Starts Ploughing the Seas
  • Yang Ming losses continue to mount after 2016 revenue slump
  • FMC green light for 2M Alliance co-operation with HMM on transpacific
  • NYK, K Line and MOL pass first marker buoy en route to the merger