Mon, Aug 20, 2018 - Page 15 News List

Yang Ming signs deal for 10 new ships

MEETING DEMAND:The 2,800 TEU container vessels will update the fleet, providing broader service coverage for long-haul and regional services, the company said

By Chen Cheng-hui  /  Staff reporter

Yang Ming Marine Transport Corp (陽明海運) on Wednesday last week signed a contract with CSBC Corp, Taiwan (台灣國際造船) for the construction of 10 2,800 twenty-foot-equivalent unit (TEU) container vessels.

The price of the new vessels is between US$35 million and US$45 million each, Yang Ming said in a Taiwan Stock Exchange filing after the contract was signed by Yang Ming chairman Bronson Hsieh (謝志堅) and CSBC chairman Cheng Wen-lon (鄭文隆).

“The new ships will help to meet the future demand for medium and long-term vessel deployments and improve Yang Ming’s fleet competitiveness,” Yang Ming said in a separate statement.

Yang Ming said it is to receive the vessels starting in the second quarter of 2020.

In the meantime, the company plans to take delivery of five 14,000 TEU chartered vessels beginning next quarter through the first half of next year, it said.

“In light of the rapid growth in emerging markets in Asia, the 2,800 TEU ships will be well-suited for deployment in most of the major ports in the region,” Yang Ming said.

“These ships will update our fleet, and provide flexibility and broader service coverage for long-haul and regional services. They will also provide efficiency, energy savings and lower unit costs,” the company said.

During the April-to-June quarter, Yang Ming’s net loss expanded to NT$3.81 billion (US$123.7 million) from a NT$1.95 billion loss in the previous quarter, the company reported on Aug. 10.

Total net losses reached NT$5.76 billion in the first half of the year, even though consolidated revenue grew 1.81 percent year-on-year to NT$64.63 billion in the six-month period and total business volume expanded 10.28 percent to 2.52 million TEUs, company data showed.

Gross margin was minus-4.28 percent and operating margin was minus-8.61 percent over the period, the data showed.

Commenting on the weak bottom-line figures in the first half, Yang Ming said they were caused mainly by unexpected higher fuel prices driving up operating costs.

“Compared with the same period last year, the average fuel price in the first half increased about 25 percent. Additionally, the shipping industry still shows an oversupply in tonnage and faces continued challenges this year,” the company said, adding that average freight rates in the first half were about 10 percent lower than a year earlier.

Yang Ming said circumstances surrounding global trade still present challenges for the shipping industry.

Demand is expected to grow 4.2 percent and supply to increase 3.7 percent next year, so the industry outlook is more optimistic, it said.

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