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UASC posts biggest loss of any major container line, says Alphaliner
DUBAI's United Arab Shipping Company (UASC) has posted an operating loss of US$299 million and a net loss of $384 million in 2015, drawn 2016 revenues of $3.32 billion. No revenue figures for 2015 were readily available.
This is the biggest loss suffered by any major container line this year, according to analysis of consultancy Alphaliner.
The Paris research house said the loss could have big implications for UASC's merger with listed German carrier Hapag-Lloyd, which was agreed in July.
UASC's operating losses have continued this year, and have been surpassed only by the near bankrupt Hanjin Shipping and Hyundai Merchant Marine.
UASC's losses have been blamed on its rapid fleet expansion and newbuilding programme for ultra-large container vessels, which since 2013 has comprised six 19,870-TEU and eleven 14,993-TEUers.
"The expansion has come at a heavy price for UASC. While the total value of ships owned by the company has increased by $1.72 billion since the end of 2014, the carrier's net debt has increased by some $1.81 billion.
"Over the same period, UASC's total equity has shrunk from $2.46 billion to $1.89 billion due to the heavy losses incurred despite the addition of these new eco ships," Alphaliner said.
Near closing a merger with UASC, Germany's top box carrier Hapag-Lloyd has little concern over the Gulf company's financial performance.
This holding "ideally" complements Hapag-Lloyd's fleet, which stood at 175 vessels with a total capacity of 955,485 TEU as of March 31, the company said.
Hapag-Lloyd has told shareholders the UASC ships can be "operated within the network of Hapag-Lloyd and its alliance partners immediately, as opposed to waiting up to three years for costly newbuildings.
"Therefore, the valuation did not focus on the earnings power of UASC on a stand-alone basis.
"Hapag-Lloyd thereby secures the large ships that it needs, especially for the Far East trade, in order to remain competitive in the shipping market and to achieve low transport costs per container," Hapag-Lloyd shareholders have been told.
This is the biggest loss suffered by any major container line this year, according to analysis of consultancy Alphaliner.
The Paris research house said the loss could have big implications for UASC's merger with listed German carrier Hapag-Lloyd, which was agreed in July.
UASC's operating losses have continued this year, and have been surpassed only by the near bankrupt Hanjin Shipping and Hyundai Merchant Marine.
UASC's losses have been blamed on its rapid fleet expansion and newbuilding programme for ultra-large container vessels, which since 2013 has comprised six 19,870-TEU and eleven 14,993-TEUers.
"The expansion has come at a heavy price for UASC. While the total value of ships owned by the company has increased by $1.72 billion since the end of 2014, the carrier's net debt has increased by some $1.81 billion.
"Over the same period, UASC's total equity has shrunk from $2.46 billion to $1.89 billion due to the heavy losses incurred despite the addition of these new eco ships," Alphaliner said.
Near closing a merger with UASC, Germany's top box carrier Hapag-Lloyd has little concern over the Gulf company's financial performance.
This holding "ideally" complements Hapag-Lloyd's fleet, which stood at 175 vessels with a total capacity of 955,485 TEU as of March 31, the company said.
Hapag-Lloyd has told shareholders the UASC ships can be "operated within the network of Hapag-Lloyd and its alliance partners immediately, as opposed to waiting up to three years for costly newbuildings.
"Therefore, the valuation did not focus on the earnings power of UASC on a stand-alone basis.
"Hapag-Lloyd thereby secures the large ships that it needs, especially for the Far East trade, in order to remain competitive in the shipping market and to achieve low transport costs per container," Hapag-Lloyd shareholders have been told.
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