Revenues at the nation’s three major container shippers continued to fall last month from a year ago amid weaker demand and lower freight rates, according to the companies’ latest data.
Evergreen Marine Corp (長榮海運), the nation’s largest container shipping firm in terms of fleet scale, posted NT$1.22 billion (US$40.2 million) in revenue last month, down 1.81 percent from a year earlier and 3.94 percent from a month earlier, it said in a filing to the Taiwan Stock Exchange over the weekend.
That brought the company’s third-quarter sales to NT$3.78 billion, down 8.72 percent year-on-year and 3.13 percent lower quarter-on-quarter.
The company’s falling revenue could be attributed to weak freight rates, Rigan Wong, a Hong Kong-based analyst at Citigroup Global Markets Inc, said in a research report issued on Saturday.
“Evergreen Marine may dip into losses in the coming quarters on the back of weak freight rates,” Wong added.
Revenue at Yang Ming Marine Transport Corp (陽明海運), the nation’s second-biggest container shipper, dropped 28.43 percent year-on-year and 6.36 percent month-on-month to NT$8.2 billion last month, company data showed.
On a quarterly basis, Yang Ming’s third-quarter sales edged up 1.31 percent to NT$25.43 billion from the second quarter on the back of peak season surcharges (PSS) starting in August, but the figure fell 26.01 percent from a year earlier.
The company’s declining profitability outlook yesterday prompted Taiwan Ratings Corp (中華信評) to lower its long-term corporate credit rating for Yang Ming to “twBBB” from “twBBB+.” It also cuts its issue rating on the company’s unsecured corporate bonds to “twBBB-“ from “twBBB.”
Taiwan Ratings said the downgrade was a reflection of its view that “worsening market conditions” would affect the company’s profitability and cash flow more than it initially expected, “further deteriorating the company’s leverage over the next two to three quarters.”
However, the agency affirmed its “twA-3” short-term corporate rating for Yang Ming, an indication that its outlook on the company’s long-term rating was stable.
Wan Hai Lines Ltd (萬海航運), the nation’s third-largest container shipper, is expected to outperform both Evergreen Marine and Yang Ming this year, given its high exposure to intra-Asia lines, which account for about 70 percent of its total revenue, Wong said.
“Wan Hai may benefit by leveraging its balance sheet to expand its fleet cheaply, thereby gaining a long-term cost advantage on the fleet, plus better fuel cost efficiency, and consolidate its market position while riding on emerging market trade growth,” Wong said.
The company reported NT$5 billion in sales last month, down 13.73 percent from a year ago and 1.52 percent from a month ago, according to its data filed with the stock exchange.
In the third quarter, revenue totaled NT$15.49 billion, 14.89 percent lower than the previous year and down 6.06 percent from the previous quarter, data showed.
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