Yang Ming Marine Transport chairman Cheng Cheng-mount said at an investors' conference on 11 May that the company wants to diversify into other industries through co-operation and investments.
He said that the company suffered losses in recent years and there is a need to maintain financial stability. Cheng was speaking the day before Yang Ming announced a Q1 net profit of TW$24.59 billion (US$862.4 million), reversing a net loss of TW$755.34 million (US$24.97 million) in the first quarter of last year.
Yang Ming achieved a (US$433.85 million) net profit in 2020 as freight rates reached historical highs amid industry-wide capacity discipline. However, for four of the previous five years, the carrier was in the red. The losses caused a recapitalisation that saw government-linked entities increase their stake in Yang Ming from 33% to 45%.
Cheng said, "Yang Ming's income should be diversified. Besides the shipping industry, Yang Ming is exploring vertical integration to widen its business scope."
Cheng stated that Yang Ming’s establishment of European subsidiaries, including Yang Ming (France), a joint venture with French freight forwarding group Naxco, launched in January, is part of the company’s business expansion.
He added that strengthening Yang Ming’s international presence will help the company’s long-term operations. Yang Ming has also established branches in Germany, Italy, the Netherlands, and Belgium.
Addressing shareholders' hopes for dividends this year, Cheng said that Yang Ming had to preserve its reserves after losses in recent years, adding that the remarkable recovery in container shipping had pushed up the stock prices of every listed liner operator. However, expectations are that positive results will continue into 2021, allowing the company to pay dividends next year.
Martina Li
Asia Correspondent
