THE IMPACT OF GLOBAL FINANCIAL CRISIS ON THE FINANCIAL STRUCTURE OF SHIPPING INDUSTRY IN TURKEY AND ANALYSIS OF NORMALIZATION PROCESS DURING 2008-2015

Year 2017, , 43 - 47, 30.12.2017

Engin Kurun Tansel Erkmen

https://doi.org/10.17261/Pressacademia.2017.744

Abstract

Objective-
The main purpose of this study is to investigate the impact of global
financial crisis on the financial structure of shipping industry in Turkey.
According to the BRSA figures as of Dec. 2016, water transportation sector
performed the highest (154.9%) non performing loan increase year to date among
all other sectors. This research will throw light on the main resons of this
situation and will also contribute the better understanding of the financial
structure of maritime companies.

Methodology-
The data related to company accounts were obtained from Central Bank of the
Republic of Turkey (CBRT) for 2008-2015. C301 Building of Ships and Boats data
series and H-502 Sea and Coastal Freight Water Transport data series are
selected to show the impact of global financial crisis on the shipping
industry. Main balance sheet and income statement data as well as financial
ratios were published by CBRT regularly for 2008-2015 in three years interval.
We aggregated them and analyzed to show the structural change in financial
preferences and adequacy of capital, liquidity and similar performance figures.

Findings-
The global financial crisis is affected the Turkish shipping industry as a
whole. The equity funds accounted for around 47% in 2008 but decrease to 36% in
2011 and recovered again up to 40% at the end of 2015. In terms of financial
structure of the sector, current liabilities almost doubled in last 8 years
from 12.5% to 25%. It is resulted with especially worsen liquidity ratio such
as cash ratio decreased from 78.5% to 17.3%. The global financial crisis
adversely affected the profitability of the sector with an unstable and
volatile profit margin and increased service and operating costs.

Conclusion-
In conclusion there is no normalization sign after 2008 in the shipping
industry in Turkey. We observed a gradual growth in the World trade. However
historically lower freight rates and imbalances in the shipbuilding industry
cause debt burden and huge losses for the maritime companies. This reseaach
findings can be used as a benchmark for the maritime companies to better
understand their performance since 2008. 

Keywords

Maritime transport, shipping industry, global financial crisis, ratio analysis, financial performance

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