Taiwanese shipowner Yang Ming is to redeliver all of its chartered-in bulkers as it focuses on its own vessels.
The Taipei-listed company said the move is part of its dry bulk business strategy, after it took an impairment hit on the ships in the second quarter.
Three vessels will be returned to their owners by the second quarter of 2021, it added.
The remaining quartet of long-term chartered ships will go between 2022 and 2025, Yang Ming said.
The company told TradeWinds the chartered fleet includes two capesizes and five panamaxes.
It said in its second quarter earnings statement: "Furthermore, with charter rates on the rise and the Baltic Dry Index posting gains, the recovering market will significantly improve its dry bulk business’ performance after the third quarter."
"In spite of the significant progress in container transport sector, the spread of the pandemic had negatively impacted the dry bulk market, resulting in quarterly losses of $20.94m [for] Yang Ming’s dry bulk business," it added.
This was mainly attributable to the recognition of impairment losses on the chartered-in ships.
In the first quarter, the shipowner booked an $11m loss from subsidiaries, including its bulker business.
It has 10 bulkers of its own, ranging from 62,000 dwt to 82,000 dwt, all run by its Kuang Ming unit.
Boxships making money
The company is better known for its boxships, however, which have benefited from strong freight rates and relatively low fuel costs.
This has boosted its second quarter containership operating profit to $18.64m, despite volumes dropping 15% due to the Covid-19 outbreak.
The overall group loss was narrowed to $2.25m in the second quarter, it said, without giving a comparative figure.
In the first six months, revenue fell 12.03% to $2.2bn.
Cargo volumes declined 9.86% to 2.38m in the same period.
The net loss for the first half year was $29.49m, which includes a loss from its dry bulk business of $30.53m.
"Looking forward, with Western countries beginning to lift social distancing measures and manufacturing productions resuming operation, the transpacific freight rates have surged to the highest level in two decades," the company said.
"The rates on Asia-Europe routes have also shown an improvement compared to the same period last year. In order to seize the opportunity, Yang Ming continues its business strategies to increase cargo marginal contribution and expand its customer base."
It is also aiming to control operating costs.
