Yang Ming Marine Transport Corp (陽明海運) plans to prioritize boosting its profitability over expanding its fleet size, chairman and CEO Cheng Chen-mount (鄭貞茂) said yesterday, adding that the firm would seek to attract foreign institutional investors with healthy financial portfolios.
Among local container shippers, Yang Ming ranks second by fleet size, with 90 vessels and an operating capacity of 621,951 twenty-foot-equivalent units (TEUs) — only Evergreen Marine Corp (長榮海運), with its 190 vessels and 1.25 million TEUs, ranks higher, the companies’ data showed.
Yang Ming has secured a 2.6 percent share of the world’s liner fleet, data compiled by Alphaliner, a France-based maritime consultant, showed.
Photo: Wang Yi-hung, Taipei Times
“We used to focus on enlarging our capacity and would order new vessels in a bid to retain our market share, but it also resulted in capital expenditures that were too high. In the future, we will order new vessels under the premise that the new vessels could help gain new profit momentum,” Cheng told an investors’ conference in Taipei.
Yang Ming aims to lower its debt-to-asset ratio, which stood at 90 percent as of the end of June, Cheng said.
Institutional investors and foreign investors hold a combined 5 percent stake in Yang Ming, a figure that Cheng said he hopes to push higher.
Yang Ming would also like to hold earnings conferences quarterly, he said.
With a net loss of NT$885 million (US$30.61 million) in the first six months of the year, the shipper stayed in the red, but the loss narrowed from NT$1.94 billion a year earlier, thanks to rising freight rates and falling oil prices, the firm said.
The shipper holds an upbeat outlook for this quarter given excess demand in the market, Yang Ming spokesperson Shih Mei-chi (史美琦) said.
Although the fourth quarter is usually the slow season for sea shipping, it is not the case this year, as a shortage of containers has led to limited supply and driven up international freight rates, Shih said.
The freight rates for routes from Asia to the US are expected to remain high until the Lunar New Year holiday next year, he said.
The shipper had feared that sea cargo demand might drop at the beginning of the COVID-19 pandemic, but it turned out that with more people working from home, orders for exercise equipment and home entertainment products have picked up — and all of those goods need to be transported by container ships, Shih said.
With the rise in freight rates and volumes, Yang Ming’s third-quarter revenue reached NT$38.85 billion, its second-highest revenue for a single quarter, it said.
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