The main carriers’ average EBIT margins fell by 3.4% from the 2Q peak of 54.3% to 50.9%. However, the gap between individual carriers are widening, with some notable drops at Wan Hai (down 13.0%), OOCL (down 8.3%), HMM (down 6.8%) and Yang Ming (down 6.1%). Carriers with a larger share on the Asia-US West Coast have suffered the largest margin erosion, with a sharper drop expected in 4Q 2022 as the rate malaise has spread to other tradelanes.
On 25 Nov, CMA CGM reported 3Q earnings which was down 7% QoQ driven by 3% QoQ lower freight rates and 9% QoQ higher OPEX. Main delta for OPEX increase are fuel and chartering expenses. CMA CGM’s group level profit margin is lower than that of the liner industry average, being affected by the less profitable logistics businesses. However, CMA CGM enjoys relatively better capital efficiency on less idle cash on its balance sheet, which helps CMA CGM deliver a Return on Equity ratio on par with
ZIM has slashed its 4Q 2022 EBIT earnings forecast to $440m from $740m, compared to $1,554m in 3Q 2022 due to falling freight rates and weaker liftings. Although ZIM has emphasized its commercial and operational agility, this will be tested over the next 2 years as it takes delivery of more than 50 newbuildings and committed vessel charters that will raise its operated capacity by some 70% (before charter redeliveries). Zim’s heavy reliance on chartered tonnage since its financial restructurin
ZIM reported before US market open on 16 Nov. Net profit was down 13% QoQ on sequentially lower freight rates, lower volume and higher costs particularly in chartering expenses. In the earnings call, the management mentioned that they have lower the signed freight rates in the existing contracts.
Wanhai reported after Friday (11 Nov 2022) closed. Net profit dropped 42% YoY and 28% QoQ. Not much surprises since the top line has been reported few weeks ago and the QoQ quantum drop in pre tax earnings eg NTD12bn is similar to the top line QoQ drop. Liners with less contracted business ratio is still see greater earnings drop near term.
Hapag Lloyd reported 3Q results before Europe opens on 10 Nov 2022 with a set of strong earning results. Full quarter effect of new contracted rates and Transatlantic exposure pushed earnings higher QoQ. Management keeps FY guidance unchanged, suggesting 4Q EBIT to fall 17% QoQ.
EMC, YMM and WHL reported October top line. In aggregate, which provide better read through for the industry, revenue in USD fell 15% MoM and 33% YoY, probably would be taken as positive surprises since the fall is less than CCFI. As additional context for this set of October figures, the Taiwanese liners' revenue fell more more than CCFI during September.
Maersk reported 3Q before market open today (2 Nov 2022). Earnings turned out better than expected (BTE) but guidance stayed unchanged, suggesting a bearish outlook. BTE 3Q Results: EBIT $9.48bn, up 5% QoQ and 62% YoY, beat Bloomberg consensus estimate of $8.63bn. The BTE earnings were due to higher contract freight rates. During the period, Maersk continued to experienced costs increase particularly in bunker and depreciation, which including chartering. Maersk's 3Q volume dropped 8% YoY and 3
TS Group, the parent company of TS Lines, has filed for an Initial Public Offering (IPO) in Hong Kong on 28 October 2022, following similar plans by CUL and LC Logistics (parent of BAL). According to information provided in its IPO filing, the intra-Far East trade accounted for 42% of TS Line's total revenues in the first half of 2022, and the share has shrunk from 95% in 2019 and 92% in 2022 to the current 42%, due to the growth of Asia-Oceania and Transpacific which currently account for 26
ONE reported better-than-expected 22Q3 (Company's FY22Q2) results during lunch break today (31 Oct 2022) but guided beginning of an earning down cycle. Net profit for 22Q3 was $5.5bn, up 31% YoY but flat QoQ. We have expected 10-20% QoQ drop in earnings for the industry for 3Q. The positive surprises came from the average freight rates which was up 5% YoY, beating the 7% QoQ drop in CCFI on likely two factors: (1) accounting delay in revenue booking because ships, particularly those in the l