Yang Ming Marine Transport Corporation (Yang Ming) noted that oversupply still dominates the maritime market in the first half, driven by global inflationary pressures and a decline in ocean rates as the shipping line reported its business performance in the first six months of 2023.
[Source: Yang Ming]
Yang Ming said consolidated revenues in the second quarter stood at NT$ 35.05 billion (US$ 1.15 billion) — and the company's after-tax net loss and per EPS came to NT$ 0.13 billion (US$ 4.27 million) and NT$ -0.04, respectively.
The consolidated revenues for the first half of 2023 were NT$ 72 billion (US$ 2.36 billion).
Yang Ming said its after-tax net profit and that per EPS were NT$ 3.27 billion (US$ 107.04 million) and NT$ 0.94, respectively.
"The maritime industry in the first half of the year was impacted mainly by inflation and uncertainty in the global economy," Yang Ming said.
"Additionally, freight rates declined compared to the same period last year, leading to a decrease in revenue compared to the corresponding period last year."
Citing data released by the International Monetary Fund (IMF) World Economic Outlook in July 2023, Yang Ming noted that despite the 3% upward revision of the global economic growth rate for 2023, the overall inflation rate is projected to decrease from last year's 8.7% to 6.8%.
However, it said that the persistent inflationary pressures have prompted the world's central banks to implement interest rate hike policies, thereby impacting economic activities.
"As a result, the overall momentum for economic recovery over the next two years still appears relatively weak," the ocean carrier said.
Yang Ming also cited the growth forecast of the analyst firm Alphaliner, that the overall supply is predicted to grow by 8.5% this year, surpassing the demand growth of 1.4%.
"As such, oversupply still dominates the maritime market, which is caused by high inflation weakening household purchasing power and demand due to ongoing inventory liquidation within industrial chains," Yang Ming said.
End of Russia-Ukraine war to boost container shipping
The shipping line noted that an end to the ongoing war between Russia and Ukraine would, however, boost the maritime industry in the long term.
"Once the Russia-Ukraine conflict comes to an end, the need for reconstruction materials during the post-war recovery period is expected to boost container shipping demand," Yang Ming said.
Meanwhile, in response to the changes in supply and demand in the shipping market, Yang Ming noted that it will continue to assess the situation with utmost care.
"The company will also be attentive to global economic developments, geopolitical influences, changes in supply chains, and environmental sustainability requirements, among other trends," it added.
Yang Ming added that there will be timely and necessary adjustments to route distribution and fleet planning to increase the company's competitiveness and operating performance.
