Officials at Yang Ming, the world’s eighth largest containerline, have dismissed the latest call for the line to merge.
Writing on LinkedIn yesterday, Lars Jensen, CEO of SeaIntelligence Consulting and widely regarded as one of the world’s top container shipping analysts, suggested Yang Ming’s continued poor financial performance made it an ideal candidate for consolidation, especially as its home, Taiwan, has more big liner companies than most places with Evergreen and Wan Hai among the top 12 global liners by capacity.
Yang Ming’s Q1 results this week recorded a net loss of $21.9m.
Looking at the total EBIT from 2012 to 2018, Jensen yesterday calculated Yang Ming had accumulated a total loss of $1bn over the seven-year period.
“This clearly must be raising questions in the Taiwanese government who owns just shy of half of Yangming,” Jensen wrote.
“With two other Taiwanese carriers performing significantly better over an extended period of time, what is the purpose of supporting a third national carrier?” the Danish analyst mused.
However, officials at Yang Ming’s headquarters told Splash today there was no discussions to merge the company. The line has had to repeatedly deny merger speculation over the past three years.
A spokesperson said the financial result in the first quarter was “better than expected”.
Going forward, the official said Yang Ming will deploy new eco-friendly vessels to optimise the fleet and lower operating costs.
The spokesperson said he was unaware of any talks with the government to merge the company with another Taiwanese liner.
YML have been one of the Top Three takeover candidates since the GFC and, strangely enough, none of those three have radically changed ownership or format in all that time.
Conversely, there have been all manner of take-overs and mergers of Hamburg Sud, the Japanese trio, CSAV, CCNI, UASC, APL, OOCL…..the list goes on. Generally speaking, the majority of the changes of ownership have been from private companies and usually healthy companies. It is not usually a good recipe to take over a failing company and especially a failing state-owned operator, as these will be propped up and will limp along with their own internal complications.
YML may look to be a company deserving to be absorbed in the name of efficiency but there is an historic and political toxicity that prevents all three strugglers from finding new ownership.