Kuang Ming Shipping, the bulk shipping arm of Taiwanese carrier Yang Ming Marine, expects better performance in the second half of 2015, said its chairman at the shareholders’ conference on 8 June.
The company admitted that the current bulk shipping market is sluggish but insists it has a great chance to improve in the second half of this year as the grain shipping season is coming and the quantitative easing policies are bringing positive effects.
Kuang Ming Shipping suffered a loss of TWD760 million (USD24.5 million) in the first quarter of 2015, leading to a loss of TWD659 million for parent Yang Ming Marine, which holds 86% of Kuang Ming Shipping’s shares.
The company currently operates a fleet of 20 bulkers, and 70 to 80% of its ships have renewed contracts at the end of 2014 and the beginning of 2015. Therefore, the ratio of spot vessels increased, which led to the huge loss in the first quarter, the company said.
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Kuang Ming Shipping pointed out that the pressure of overcapacity still exists and the bulk shipping market will have the chance to ‘bottom out’ only when commodity prices stop falling and trading volumes return to normal.
Yang Ming Marine’s performance in the first quarter of 2015 was worse than expected, shipping analysts said. The carrier recorded revenues of TWD33.2 billion and profits of TWD303 million for the first quarter of 2015 and is expected to report revenues of TWD35.1 billion for the third quarter of 2015.