Yang Ming blames economic uncertainty for $4M Q2 loss
Yang Ming Marine Transport Corp. on Friday reported a second-quarter after-tax net loss of $4.27 million.
The Taiwanese ocean carrier’s first quarter was better than the second, propelling it to an after-tax net profit for the first six months of 2023 of $107 million. Still, that’s a $3.9 billion nosedive from the first half of 2022.
Consolidated revenues were $1.15 billion for Q2 and $2.36 billion for the first half of the year.
“The maritime industry in the first half of the year was impacted by inflation and uncertainty in the global economy,” Yang Ming said in its four-paragraph news release, which did not include year-over-year comparisons or charts. “Additionally, freight rates declined compared to the same period last year, leading to a decrease in revenue compared to the corresponding period last year.”
FreightWaves reported last year that Yang Ming had second-quarter consolidated revenue of $3.8 billion. In 2022, Yang Ming had a net profit of $1.9 billion in Q2 and $4.04 billion in the first six months of the year.
Yang Ming on Friday cited an Alphaliner forecast that said overall supply is expected to grow by 8.5% this year while demand is predicted to grow by only 1.4%.
“As such, oversupply still dominates the maritime market, which is caused by high inflation weakening household purchasing power and demand due to ongoing inventory liquidation within industrial chains,” Yang Ming said. “However, once the Russia-Ukraine conflict comes to an end, the need for reconstruction materials during the post-war recovery period is expected to boost container shipping demand.”
Regarding when it expects a rebound, Yang Ming said that “persistent inflationary pressures have prompted the world’s central banks to implement interest rate hike policies, thereby impacting economic activities. As a result, the overall momentum for economic recovery over the next two years still appears relatively weak.”
Yang Ming said because of the continuing weak market it will make “timely and necessary adjustments” to its routes and fleets in an effort to increase its competitiveness and operating performance.
Established in late 1972, Yang Ming operates a fleet of 94 vessels with a carrying capacity of 715,000 twenty-foot equivalent units. It is the ninth-largest ocean carrier in the world.
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Click here for more American Shipper/FreightWaves stories by Senior Editor Kim Link-Wills.
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