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

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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