Alphaliner: Container Carrier Giants End 2016 in Red

Image Courtesy: HMM

Despite the freight rate improvements that followed the collapse of Hanjin Shipping in late August, the average operating margins of 13 main container carriers remained negative in the second half of 2016, according to Alphaliner.

Due to the tough operating environment, only three carriers recorded positive operating results for the full year 2016, while the remaining ten carriers ended the year in the red.

After slumping to -9.2%, the average carrier operating margin of CMA CGM, China Shipping Container Lines, EMC, Hanjin, Hapag-Lloyd, Hyundai Merchant Marine (HMM), K Line, Denmark-based Maersk, Japan’s Mitsui O.S.K. Lines (MOL), NYK Line, Wan Hai Lines, Yang Ming Marine Transport, and Israel’s Zim Integrated Shipping Services (ZIM) stood at -1.2% in the fourth quarter of 2016.

South Korean carrier HMM recorded the worst operating results among the main carriers in 2016, as its container shipping business chalking up operating losses of KRW 692 billion (USD 595 million) for a full year operating margin of -18.5%.

HMM was therefore forced to undergo a financial restructuring exercise involving a debt-equity swap of KRW 1.1 trillion, extension of the bond maturities of KRW 0.8 trillion and charter rate adjustments of KRW 0.43 trillion, as well as the disposal of various assets, Alphaliner informed.

The company will continue to rely on state support, including a government program to acquire and charter back HMM’s ships with the loss from the sale to be recovered by HMM through capital injections by the Korean government.

Another container carrier, the Taiwan-based Yang Ming, also had to rely on state support after posting operating losses of TWD 15.16 billion (USD 470 million) for a negative margin of -13.1% in 2016.

The Taiwan government’s National Development Fund (NDF) took a 6.4% stake in Yang Ming under a recapitalisation program in February 2017 that raised TWD 1.69 billion (USD 54 million) from six investors headed by the NDF. Alphaliner said that the NDF is expected to continue to support Yang Ming’s subsequent capital raising programs.

Share this article

Follow World Maritime News

In Depth>

Events>

<< Jun 2017 >>
MTWTFSS
29 30 31 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 1 2

Indonesia Marine & Offshore Expo (IMOX) 2017

Indonesia Marine & Offshore Expo (IMOX) 2017, Batamis an international maritime and offshore industrial event that brings an international…

read more >

CWC World LNG & Gas Series: Americas Summit

Now in its 15th year, the CWC World LNG & Gas Series: Americas Summit is the longest running LNG event in the Americas region.

Bringing together the key players in the LNG & gas value chain in both the Americas region and globally, this is the perfect place to make new contacts, do deals and get essential updates on the market.

This year we return to Houston, TX once again on 20-23 June 2017 – the heart of the energy industry, making it easier than ever to access they key players in your business.

More info

read more >

TOC Europe

TOC (The Terminal Operations Conference) has long been considered best in class by container terminal operators and their suppliers…

read more >

Marine Philippines 2017

The 4th edition of PHILIPPINES MARINE 2017, SHIPBUILD PHILIPPINES 2017 and OFFSHORE PHILIPPINES 2017 is the only specialized Shipbuilding…

read more >