# Japanese container carriers hit with deficits in 2016



## RHP (Nov 1, 2007)

Japanese container carriers Mitsui OSK Line, Nippon Yusen Kaisha (NYK Line), and K-Line finished the first nine months of the displaced fiscal year 2016/2017 with strained numbers on the bottom line.

Things look the most dire for NYK Line, which suffered a massive deficit of JPY 226 billion, or USD 1.98 billion. The loss is especially attributed to a JPY 200 billion impairment on the carrier's fleet.

At K-Line, the bottom line came to a deficit of JPY 54.5 billion, while MOL can be pleased with a profit of JPY 19 billion – though MOL suffered an operating deficit of JPY 2 billion.

The low container freight rates in particular have put the Japanese carriers under pressure during the past year, and as such, the three carriers have decided to join forces in a new joint venture covering overseas routes.

The collaboration comes in recognition of the fact that remaining competitive in the hard-pressed container industry today and going forward will require economies of scale.

Combined, the three Japanese carriers will control the world's sixth-largest container fleet, with a total capacity of more than 1.7 million teu, including newbuildings which have yet to be delivered.

However, the worst times could be over for the carriers. NYK Line and MOL are both upgrading their guidance for the coming year, as NYK now expects a result of zero while MOL projects a JPY 7 million profit.


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## RHP (Nov 1, 2007)

31.01.17: Chinese container carrier Cosco Shipping has published its preliminary annual report for 2016, and the company projects a loss of around 10 billion yuan, or USD 1.5 billion for the full year.

The projected loss is attributed to rising costs and asset impairments.


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## RHP (Nov 1, 2007)

27.2.2017

Dear Customers and business partners

With much regret we have to inform you that today the company Helship AG (ZIM SWITZERLAND Unit of Helship AG) had to deposit the balance sheet with local court.

We thank you for your support and loyalty since the incorporation of Helship AG in 1989

The handling of the pending shipments will be made in accordance and on instruction of the assignee in bankruptcy.

Best regards
General Manager / Helship AG


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## RHP (Nov 1, 2007)

*Container industry suffers record deficit in 2016*

With the latest big deficit from Taiwanese container carrier Yang Ming, a clear picture is starting to form of the financial woes that characterized the sector last year.

Yang Ming, part of the new The Alliance, suffered a USD 493.6 million loss, thus almost doubling the deficit from the year before. And if one adds this sum of nearly half a billion dollars in losses to the results already published by competitors, 2016 looks to be on par with the dreadful container year 2011.

Not all container carriers have announced annual results yet but the vast majority have, and a deficit has already ac***ulated to USD 5.3 billion, according to calculations made by SeaIntelligence Consulting for ShippingWatch.

Other major contributors to the poor result include Maersk Line with a loss of USD 376 million and CMA CGM with a deficit of USD 452 million.

Combined USD 7 billion

Seaintelligence Consulting CEO Lars Jensen notes that results have yet to be published from significant players such as Evergreen and Hamburg Süd, which is set to be taken over by Maersk Line later this year if regulators clear the transaction.

Included in the USD 5 billion is the half-year result from Hanjin, which collapsed in late August last year and thus has not released an annual report. The sum also counts results for the first three quarters at Taiwanese Evergreen and the first six months at UASC, which announced a merger with Hapag-Lloyd last year.

The actual combined annual result for the container carriers in 2016 is undoubtedly much higher and, according to Lars Jensen, likely on par with 2011, which was the year when Maersk Line booked a USD 600 million deficit.

Like Hanjin's collapse

"Overall, this provides for a known loss of USD 5.3 billion for carriers which have announced their financial performance. Assuming that this result on average is representative for carriers which have not yet published numbers, the estimated loss for all carriers is a combined USD 6.9 billion," Jensen tells ShippingWatch.

China Cosco Shipping Holdings, the world's fourth-largest container carrier, on Friday published a full-year deficit for 2016 of USD 1.44 billion.

The most recent major deficit from Yang Ming is reminiscent of last year, in which Hanjin fought a downhill battle to survive during the spring and then folded in late summer as the South Korean government decided to bank on the country's other major container carrier, Hyundai Merchant Marine (HMM), which was also in severe financial trouble. Hanjin was a member of the Hapag-Lloyd dominated G6 alliance, to be replaced this Saturday, April 1, by The Alliance, of which Yang Ming will be a member.

The downturn at Hanjin and the subsequent criticism from customers caused members in The Alliance to establish an contingency fund which can take over container transport if a carrier cannot meet its commitments.

Projected developments in 2017 differ widely for the different container carriers. While Maersk Line and CMA CGM are very optimistic, Hapag-Lloyd's CEO is somewhat more uncertain about whether a good year is in the cards.

CEO Habben Jansen will now pay back Hapag-Lloyd's owners

One of the most significant changes on the container market in 2016 concerned the number of alliances, which fell from four to three, and the number of major container carriers, now down to eight. The hope at the remaining carriers is that the consolidation and the streamlined networks, which will be launched this Saturday, will create a foundation for a recovery in the industry and much better results.

Maersk Line's alliance partner MSC does not publish annual results.


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## Dartskipper (Jan 16, 2015)

All this detailed analysis seems to prove that the Global economy is indeed slowing down. The Japanese economy has been struggling to grow significantly for years, and some of their major corporations are finding profit making difficult.

For instance, Hitachi have unloaded their power tool division recently. They acquired Metabo last year in an attempt to gain some growth in the European market. I believe that Hitachi also have problems in their nuclear reactor manufacturing division, too.

Most of our electronic and other high value consumer goods, clothing, hand tools, hardware and indeed some brands of autos are sourced from countries in Asia and the Far East, and if sales are struggling in the developed countries, it's no wonder that fewer container ships are needed.

Roy.


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## RHP (Nov 1, 2007)

31 Mar (4 days ago)

*Cosco booked huge loss in 2016*

China Cosco Shipping Holdings, the world's fourth largest container carrier, booked a huge loss in 2016 whereby the carrier's deficit came to USD 1.44 billion. 

Weak freight rates and costs to restructuring contributed, according to the carrier, reports Reuters. 

The container carrier expects that 2017 will be better than 2016 for the carrier, because the market will be generally better. 

China Cosco Shipping Holdings was established last year as a merger between China's two major container carriers and thus reached up to fourth place in the ranking of the world's largest container carriers. The company's total fleet amounts for 8.1 percent of the global fleet. In comparison, Maersk Line, the world's largest container carrier, owns 15.8 percent of the global fleet. 

China Cosco Shipping Holdings' fleet consists of 304 vessels in total, while the carrier has alliances with CMA CGM, Evergreen and OOCL.


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## RHP (Nov 1, 2007)

Alphaliner: Growing uncertainty about Yang Ming's financial state

This Monday, Taiwanese container carrier Yang Ming tried to calm the carriers customers and shareholders by issuing a notice to the Taiwan Stock Exchange informing that the suspension of the carrier's share is part of a standard procedure for companies facing recapitalization.

But the lack of more specific and detailed information from the carrier's executive team seems to leave many analysts and the market with several questions about the carrier's actual financial state.

Trading of the Yang Ming share has been suspended since April 20 and will remain so until May 3, at which point the number of shares in the company will have been reduced by more than 50 percent.

According to Yang Ming, the suspension of the share will be followed by a capital injection, yet analyst firm Alphaliner writes in its newsletter Wednesday that a shortage of information about the upcoming recapitalization has only increased uncertainty in the market concerning the state of Yang Ming's finances.

Taiwan's Yang Ming in a tough battle for its future 

In particular, the firm points to a need to learn the identities of new investors, the timing of a capital injection, as well as the scope of the fresh capital.

Yang Ming raised USD 54 million in February through a closed share sale with the state-owned National Development Fund as buyer, but this figure is far from enough to cover the carrier's capital needs.

Alphaliner estimates that the carrier, which has the highest net debt-to-equity ratio among the major container carriers (486 percent), needs at least USD 300 million if it wants to avoid liquidity problems over the next 12 months.

The Taiwanese carrier is expected to present a new net deficit for the first quarter, according to Alphaliner's estimates, as revenue continues to slide.


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