Yang Ming Marine Transport has reported a TW$4.31 billion (US$143.43 million) loss for 2019, amid difficult conditions for the liner industry.
The loss was the second straight deficit for the Taiwanese mainline operator, which incurred a TW$ 6.3billion (US$206.3 million) loss for 2018.
Yang Ming said on 31 March 2020 that it transported 5.43million TEU in 2019, up from 5.23million TEU in 2018, resulting in revenue rising by 5%, to TW$141.8 billion (US$4.72 billion). However, high expenses made profitability elusive. Furthermore, the IFRS 16 accounting regulations, which recognise liabilities for all assets on long-term leases, meant that Yang Ming had to take more costs into consideration.
Another factor behind the loss was Yang Ming’s decision not to buy back two ships that were sold on leaseback terms, due to a significant depreciation in the asset values. This resulted in a one-off TW$1.39 billion (US$45 million) loss.
With regard to challenging market conditions caused by the Covid-19 pandemic in 2020, Yang Ming’s management said that the company has extended its membership of THE Alliance to 2030.
Yang Ming said, “Routes can be matched with the most suitable ship type while turnaround time in ports can be shortened with strategic planning. We think this will effectively improve the utilisation rate of container slots.”
Yang Ming’s management added that the company is building several fuel-efficient ships of 11,000TEU and 2,800TEU. These will replace older ships that are on long period charter and thus, alleviate cost pressures on the company.
Although Yang Ming is publicly listed on the Taiwan Stock Exchange, the Taiwanese government has a stake of around 45% in the company, held through the Ministry of Transportation & Communications and the National Development Fund.