Industry News

AlixPartners: Some carriers struggling to pay for capex, debt

AlixPartners: Some carriers struggling to pay for capex, debt

The consulting firm’s Hong Kong director says a proportion of carriers are still not generating enough cash to pay for ship building programs, or worse, to pay off debt, though the industry as a whole is getting better financially.

Information derived from American Shipper |  By:  Eric Johnson  |   October 16, 2015

The container shipping industry is gradually improving its financial performance but vulnerabilities remain for select carriers, according to AlixPartners’ Hong Kong Director Brian Nemeth.  Nemeth said in a presentation at the TPM Asia conference in Shenzhen Wednesday that seven carriers had negative earnings before interest, tax, depreciation and amortization in 2011, a number that had fallen to just one in 2014.

Nemeth noted, however, that five carriers are currently not generating enough cash to pay their debts, though the industry as a whole is relatively healthy in this metric.

Finally, Nemeth said a number of carriers didn’t have enough cash from operations to finance newbuilds between 2011 and 2014, meaning they had to seek outside sources of funding for capital expenditures.

To read full article, click here.

container ships docked in port

{Photo: Depositphotos.com/alptraum}