Britain To Build A ‘National Flagship’ To Promote Maritime Trade
by Alistair Smout (Reuters) – Britain is to build a new flagship to promote its business and trade interests around the world, the government said on Saturday, in a move it...
By Mike Wackett
Taiwan’s largest container shipping company, Evergreen, has joined the growing group of carriers selling assets to turn around a year of loss-making liner services.
It has announced it has sold 32,000 containers for around $2,000 each.
Prior to the announcement, a Drewry Equity Research report on Evergreen Marine Corp predicted that full-year losses were certain, noting an 11% year-on-year decline in revenue in the traditionally stronger peak season third quarter.
Moreover, Drewry said with 26% of Evergreen’s revenue derived from Asia-Europe and 40% from North America, both trades “failing to meet industry expectations” did not augur well for the carrier’s full-year 2013 result.
Drewry was however more optimistic about 2014, predicting “a return to full-year profitability”.
But despite the report, it is thought that Evergreen could see a profit for the year after selling $75m worth of containers to a so-far-unnamed buyer – compensating for a net loss of $67m recorded in the first nine months of the year.
Evergreen reported the sale in a filing to the Taiwanese stock exchange, saying that it had disposed of the containers held by its fully-owned subsidiary Greencompass Marine, and that the gains should be recognised in the current fiscal year.
Evergreen’s solution of selling assets to boost its bottom line is an increasing norm for the liner shipping business. China Shipping announced its intention at the end of 2012 to sell a fifth of its shipping containers – around 140,000 units – for $360m to CLC Maritime Container Leasing. At the time, China Shipping said that it would lease back the equipment for four years and see a profit of $112m on the deal.
Ocean carriers “selling the family silver”, in an industry that has collectively turned a profit in just one of the past five years, include CMA CGM and MSC. The second and third-ranked carriers have both sold stakes in “non-core” terminal operations to bolster their bottom line, with the former selling other assets, including its boutique cruise shipping operation.
APL’s parent, NOL, completed the sale of its iconic Alexandra Road headquarters in Singapore in February, for a reported $380m, leasing it back at an estimated $2m a month – once again to provide cash to feed its liner shipping business.
Ocean carriers are increasingly becoming asset-light, according to Drewry’s 2013 Container Lease Industry Review, which reported 58% of all newbuild containers were purchased by lessors in 2012. Drewry also noted the trend of lessors to acquire older equipment from cash-strapped carriers on a lease-back basis.
Meanwhile, Evergreen last week held a naming ceremony for the 8,45 teu Ever Lotus – the 15th delivery in an order of 30 sister ships. It will replace an older vessel on the line’s Asia-Europe service.
In his speech at the naming ceremony, vice-group chairman Raymond Lin was optimistic for this particular vessel’s voyage results. He said: “The naming ceremony today has a very special meaning. Lotus is a flower blooming on the water; so our newest vessel has a name that is symbolic. She will always sail the seas in full bloom. That is to say, fully loaded and bringing prosperous business to Evergreen Group.”
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