ALONG with Israel’s ZIM and Taiwanese compatriot Wan Hai, Yang Ming was one of the few top container lines to record a negative EBIT in 2023, according to Alphaliner, but it’s bounced back in 1Q 2024.
On Friday [10 May] Yang Ming reported consolidated revenues in 1Q of NT$43.8 billion (US$1.39 billion), up 18.5% year-on-year. The net profit after tax stood at NT$9.38 billion (US$298.42 million) a 173% increase over 1Q 2023, with an EPS (earnings per share) of NT$ 2.69.
In 1Q 2024, the supply chains of container shipping industry encountered challenges from the Red Sea crisis, leading vessels to divert to the Cape of Good Hope, which absorbed vessel capacity, Yang Ming said.
Meanwhile, demand improved given the gradual enhancement in the manufacturing PMI of major economies, smooth inventory destocking on the client side, and manufacturers resuming production post-Chinese New Year. Overall, the company delivered positive results in 1Q, it said.
“Looking ahead, the Organization for Economic Cooperation and Development upped the global GDP growth rate for 2024 by 0.2% from February’s forecast to 3.1% on 2 May. Despite the steady growth of global economy, geopolitical risks persist.
“Furthermore, the U.S., India, and other emerging markets are showing strong signs of recovery. With fiscal stimulus measures, China’s economic growth is expected to surpass expectations, and inflation is easing in most economies. Major central banks worldwide may consider cutting interest rates to boost household purchasing power and economic growth. Nonetheless, potential geopolitical conflicts escalating could disrupt energy and financial markets, impacting the global economy significantly.
“According to Alphaliner’s latest forecast, capacity supply growth in 2024 is expected to be at 9.7%, exceeding demand growth at 3%. However, uncertainties still linger over the maritime industry, with geopolitical factors causing delays in turnaround times and port congestion. Furthermore, the Panama Canal transit restrictions continue despite an improvement in water levels. The conditions are expected to persist until 2025, impacting vessel supply and stable service.”
Yang Ming said that faced with shipping oversupply and geopolitical uncertainties, it will remain “cautious and actively adjust business strategies for vessels, containers, and terminals to provide global customers with stable and efficient transportation services.”
