Yang Ming Marine Transport Corp (陽明海運) said yesterday that global container shipping companies face challenging times before seeing a rebound in 2015 on the back of improvements in supply and demand.
Oversupply has made it difficult for major container shippers to raise freight rates, including those from Taiwan, Yang Ming chairman Frank Lu (盧峰海) said.
“It would be a big challenge for the container shipping industry to improve its performance before the end of next year,” Lu told the company’s annual general meeting.
The failure of several shipping firms to boost freight rates over the past two months also signifies a difficult year ahead, he said.
However, Yang Ming aims to break even this year through cost control and route adjustment, he said, adding that the company hopes to raise freight rates next quarter.
Shareholders of Yang Ming — Taiwan’s second-largest container shipper by fleet size — yesterday approved the company’s plan to retain all of last year’s net profit for further investment instead of distributing dividends. The company posted net profit for last year of NT$65.24 million (US$2.18 million), or NT$0.02 per share.
Besides Yang Ming, two other listed container shippers in Taiwan also held their annual shareholders’ meetings yesterday.
Evergreen Marine Corp (長榮海運), the nation’s largest container shipper, said its shareholders also agreed not to distribute dividends.
The company reported a net loss of NT$1.84 billion, or NT$0.53 per share, for the January-to-March quarter. The company reported net profit of NT$128.53 million, or NT$0.04 per share, last year.
However, shareholders of Wan Hai Lines Ltd (萬海航運), the nation’s third-largest container shipper, which focuses on intra-Asian routes, approved the company’s plan to distribute a cash dividend of NT$0.8 per share, on the back of net income of NT$1.82 billion, or NT$0.82 per share, recorded last year.
SinoPac Securities Investment Service Co (永豐投顧) yesterday maintained a relatively upbeat view for the container shipping industry in the third quarter, expressing confidence that freight rates on US and European routes would start to rebound from July.
In addition, bearish sentiment in the first half may lead some container shippers to control transport capacity more cautiously, further accelerating the rebound in freight rates, SinoPac Securities said in a research note.