Yang Ming Marine Transport Corp (陽明海運), the nation’s second-largest container shipper in terms of fleet size, expects revenue to grow about 10 percent next year on the back of rising demand driven by a mild global economic recovery, a company official said yesterday.
The container shipper also looks to be returning to the black this year, after it sold a 30 percent stake in Kao Ming Container Terminal Corp (高明貨櫃碼頭) — its container terminal operator subsidiary in Kaohsiung Harbor — to three Chinese shipping companies for US$135 million on Wednesday.
“The growing momentum in the global economy next year will be stronger than this year, further raising transport volume for container shippers,” Yang Ming chairman Frank Lu (盧峰海) told a media briefing after a ceremony celebrating the company’s 40th anniversary in Kaohsiung.
The shipper will increasingly focus on launching more Asian routes next year to shift more capacity to countries with greater economic growth and higher demand, Lu added.
However, Yang Ming maintains a “cautiously optimistic” view on the company’s sales performance and profitability next year amid concern about the issue of oversupply, as the number of vessels planned to be delivered next year remains high.
The latest research by Alphaliner shows that container vessel orders placed by non-operating ship owners have been showing a downturn, accounting for 37.1 percent of all orders, signifying a trend of slowing oversupply in the near future.
However, a figure between 20 percent and 30 percent would be a healthier level for the container shipping sector, Lu said.
Therefore, Lu said the sector’s profitability next year still depends on major shippers’ control on capacity to maintain freight rates.
Meanwhile, Lu said he expects global crude oil prices to show a declining trend next year, as the US and Russia both plan to increase supply, with liquefied natural gas to be further developed in the near future.
This will be the other key factor affecting Yang Ming’s profitability next year, as fuel usually accounts for 25 percent to 28 percent of the company’s overall costs, he added.
Meanwhile, Lu said he expected Kaohsiung’s Kao Ming Container Terminal to see throughput volumes expand next year, after teaming up with the three Chinese companies — COSCO Pacific Ltd (中遠太平洋), China Shipping Terminal Development Co (中海碼頭發展) and China Merchants Holdings (International) Co (招商局國際).
A China Ocean Shipping Co’s (COSCO, 中遠集團) official, who participated in yesterday’s ceremony, said the company would bring in up to 2 million twenty-foot-equivalent units (TEUs) of containers to Taiwan next year through cooperation with Kao Ming.
Yang Ming posted net losses of NT$2.49 billion (US$85.5 million), or NT$0.88 per share, in the first three quarters of the year, compared with a net loss of NT$5.3 billion (NT$1.88 per share) a year ago, while consolidated revenue totaled NT$96.47 billion in the first nine months, up 9.63 percent from a year earlier, company data showed.
The company’s shares rose 1.53 percent to close at NT$13.25 in Taipei trading yesterday.