Taiwan carrier Yang Ming rode the crest of a wave of new e-commerce business as consumers reached for e-commerce solutions to the restrictions imposed by the spread of Covid-19, boosting the line’s income as a consequence.
The container shipping market’s dramatic swing into the black in the last months of 2020 boosted Yang Ming results and the Taiwanese carrier achieved a slight increase in its revenues despite an important decline in its volumes.
After the initial downturn in the first half of 2020, the container shipping market saw a boost in demand, “The rebound was supported by the change in consumer behaviour during the Covid-19 lockdown, including the accelerated adoption of e-commerce, and the increased needs for hygiene products, housewares and work-from-home essentials.”
This sudden inventory decline caused a huge surge in demand and resulted in a global shortage of empty containers and capacity constraints that finally led to the increase in freight rates on the East-West and intra-Asia trade routes, which supported Yang Ming’s financial performance.
Driven by this new reality Yang Ming reported consolidated revenues of US$5.11 billion in 2020, slightly increased by 1.4% compared with 2019, mainly driven by higher freight rates and relatively low bunker fuel prices. Additionally, the company’s profit after tax reached US$400 million. At the same time, Yang Ming has handled a total of 5.07 million TEU during 2020, which represents a 6.63% year-on-year decline.
Meanwhile, Yang Ming took delivery of a total of six 2,800TEU wholly owned vessels and three 11,000TEU chartered vessels in 2020, which were put into services to further facilitate demand growth and bring greater operational efficiency.
The Keelung-based carrier has successfully eliminated accumulated deficit by the end of 2020. To further enhance its finance, Yang Ming intends to launch domestic cash capital increase with the issuance of no more than 300 million new common shares, and conduct public underwriting by the way of book building.