S&P: Credit Quality of SE Asian Owners Drops
Standard & Poor's said the credit quality of shipping companies across Southeast Asia has suffered in the last two years, with most companies in the "weak to vulnerable" range, compared with "fair to weak" previously. "Earnings vulnerability and aggressive capital structures, characterized by modest and volatile cash flows and high debt levels, have strained the ability of many companies to meet financial obligations in a timely manner," shipping analyst Ee-Lin Tan said
Tan said underpinning the deterioration were limited geographic diversity and exposure to regional trade flows, intense price-based competition led by lower cargo traffic in certain trade routes and excess capacity within several shipping segments.
She said the developments had caused freight rates to drop significantly and had heightened the risk of single-segment operations for many Southeast Asian shipping
companies. Weakened earnings, rising operating costs, large foreign exchange losses as a result of the depreciation of regional currencies against the U.S. dollar, and a heavy reliance on debt to finance aggressive capital expenditure programs in the past have caused credit measures to worsen significantly, she said.
SE Asian Shipping Companies Reviews by S&P
Shipping company Overall credit profile
Neptune Orient Lines Ltd.
Malaysia International Shipping Corp Fair
Regional Container Lines Public Co. Weak
Osprey Maritime Ltd. Weak
Samudera Shipping Line Ltd. Fair
William, Gothong & Aboitiz Inc.
Precious Shipping Public Co. Ltd. Vulnerable
PT Berlian Laju Tanker Tbk. Vulnerable
Thoresen Thai Agencies Public Co. Ltd. Vulnerable
Negros Navigation Co. Inc. Weak