Big box carrier quarterly profits go south as freight rates plunge
Time：2016-10-11
Browse：250
This was blamed on plummeting freight rates that pushed profits down to levels not seen since 2012, noted Lloyd`s Loading List.
The weak performance is expected to persist in the second half, despite a recovery in freight rates recorded in the third quarter, following the withdrawal of Hanjin Shipping`s services in September.
However, these rate gains had already started to fall off, with carriers focussing on winning market share at the expense of pricing discipline, Alphaliner said.
The onset of the winter slack season would put further pressure on freight rates as demand fell.
Wan Hai was the only carrier surveyed to post positive earnings in the second quarter. Even Maersk posted an operating loss of US$111 million for the quarter for a profit loss of 2.2 per cent.
While weak earnings were behind the collapse of South Korea`s Hanjin Shipping, its negative operating margin of -14 per cent was not the worst in the sector, Alphaliner said. Compatriot Hyundai Merchant Marine posted the weakest margin of -26.7 per cent.
Zim posted a core operating loss of $40.5 million and a net loss of $74.6 million in the second quarter, as it sank to a negative equity position of $62.7 million against total debts of $1.4 billion at the end of June this year.
While the fallout from Hanjin`s collapse had yet to be fully measured, most of the company`s assets were expected to be liquidated and it was likely to emerge from rehabilitation only as a much smaller niche carrier, Alphaliner said.