Yang Ming, HMM post quarterly losses and expect more heavy weather
TAIWAN's Yang Ming and Korea's HMM suffered first quarter losses as the coronavirus took its toll on Chinese volumes, reported IHS Media
TAIWAN's Yang Ming and Korea's HMM suffered first quarter losses as the coronavirus took its toll on Chinese volumes, reported IHS Media.
Alphaliner said the two carriers will raise their capacity over the next two years. Yang Ming is to receive 14 new ships of 12,000 TEU each, and 10 ships of 2,800 TEU in 2020-22
HMM will receive 12 new ships of 23,000 TEU - two of which have been delivered and eight units of 15,000 TEU in the next 18 months.
HMM set to receive US$382 million from the South Korean government, and Yang Ming's board earlier this month approving a private placement of 300 million shares to raise capital.
HMM reported an 18.7 per cent decline in the first quarter of container volume to 890,000 TEU, but cost-saving efforts and the securing of higher-yield cargo allowed revenue to remain flat at $1 billion, the carrier said in a statement. While HMM reported a net loss of $55 million, it was still a 63.2 per cent improvement on the same quarter last year.
'Trade volumes are expected to be weakened as a result of demand-side impacts in the US and Europe, as well as continued lockdowns worldwide. Rising concerns over the US-China trade tensions related to geopolitical risks also can intensify the situation,' said an HMM statement.
Yang Ming Line reported a $27.15 million loss in the first quarter, with revenue falling one per cent to $1.15 billion. Volume was down four per cent year on year to 1.24 million TEU, while bunker fuel costs went up five per cent as the IMO 2020 low-sulphur fuel regulation kicked in on January 1.
'Coupled with the slow resumption of production after Lunar New Year, and the proactive service and space reduction plan instituted by THE Alliance in response to the COVID-19 outbreak, container business earnings were weaker than expected,' said Yang Ming in a statement.
Said Drewry analyst Simon Heaney: 'We are seeing some countries starting to relax lockdown measures, but it is unlikely you will see an immediate return to business in the near term.'