Taiwan-based Yang Ming Marine Transport Corporation posted a full-year net loss for 2018, as the shipping company’s revenues rose.
The company’s net loss after tax stood at TWD 6.59 billion (USD 213.7 million) in 2018, compared to a net profit after tax of TWD 0.32 billion seen a year earlier.
The consolidated revenues for 2018 totaled TWD 141.83 billion, up by 8.21 % compared to revenues of TWD 131.08 billion recorded in 2017.
As explained, Yang Ming’s 2018 operating results have been significantly impacted by higher global bunker fuel prices, which increased by 31.17% compared with the previous year.
Volumes in 2018 increased to 5,232 thousand TEUs, up 11% year over year when compared to 4,722 thousand TEUs handled in 2017.
“Despite the 11% volume growth due to strategies implemented in 2018, Yang Ming’s operating margins were eroded by higher bunker costs,” Yang Ming said in a statement.
Moving into 2019, unsettling geopolitical risk factors, including the ongoing US-China trade war and Brexit, continue to impact bunker fuel prices and conditions in global trade. In addition, the International Maritime Organization (IMO) 2020 sulphur regulations will inevitably increase operating costs, the company explained.
Based on the latest forecast from Alphaliner, the supply growth rate in 2019 is projected at 3.1% while the demand rate will grow at around 3.6%. Therefore, the trend in global shipping is moving towards a more balanced level of supply and demand.
The sulphur cap could prompt scrapping of older, inefficient vessels in the near term. This would add complexity and challenges to the shipping market, Yang Ming believes.
“In light of the uncertainties surrounding global trade and the pressure on bunker prices, Yang Ming remains cautiously conservative on its outlook for 2019,” the carrier concluded.