Yang Ming and Wan Hai also reported their September revenue. Including Evergreen, all three Taiwanese container liners reported MoM decline in September. For the quarter, 3Q 2023, and three liners in aggregate, total revenue was up 2% QoQ where EMC's on going consolidation of unlisted assets may have played a factor. For the liners already reported, OOIL, Yang Ming and Wan Hai reported QoQ decline in revenue during 3Q 2023. For the second year in a row, the peak season has not brought about any
OOIL’s top line breakdown for 3Q 2023 saw total revenue slip by 11% QoQ and 65% YoY driven primarily by the drop in average freight rates. The fall is larger than market forecasts with OOIL’s average freight rates falling by more than CCFI levels on a QoQ basis, even after excluding the impact of the sharp fall in Transatlantic rates which is outside of the CCFI scope. OOIL’s Transpacific freight rates fell by 2% despite the rate increases in July and August. OOIL’s 3Q23 EBIT is expected to rec
Liners have as much cash as the value of the vessels on their balance sheet, after the last 3 years of excess super normal earnings. As at the end of 2Q 2023, the 8 major liners that published their balance sheet data have $93bn cash against $106bn PP&E and RoU (Right-of-Use) assets owned and leased, which consists mainly of ships and containers. Cosco, Evergreen, HMM and Yang Ming has higher cash holdings than their PP&E and RoU asset values.
Taiwanese liners’ August revenue in NTD moved up 6% MoM, but revenue in USD moved up less at 4% MoM. In either currency, the rebound is better than CCFI on likely sequential volume growth. Since hitting the bottom in February, these liners’ monthly revenue has rebounded between 3%-27% with EMC leading due to its ongoing consolidation of the unlisted ship owning entities highlighted by the acquisition of the privately owned Evergreen Marine (Singapore) (EMS) for $780m on 19 June 2023, in a landm
Carriers reported a mixed 2nd quarter 2023 performance, with 3 carriers able to reverse their earnings decline despite the weak market conditions. OOCL and COSCO jumped to the top of the carriers earnings table with their outsized 2Q earnings despite weaker revenue and freight rates. OOCL and COSCO’s EBIT margins at 31.8% and 24.8% are more than 3 times higher than the average of the next 8 carriers which stands at just 6.7%. COSCO reported at the group level a $5.7 Bn improvement in its equ
COSCO reported full set of interim results in Asian evening of 29th Aug. Since bottom line has already been given in the alert published on 3rd July, the new news were in the top line and the costs, which give some clues as to how Cosco outperformed the industry in EBIT margin development in this down cycle: Cosco’s 2Q EBIT margin was 25% against the average of the next 8 carriers which stands at just 6.7%. Cosco’s 2Q revenue (-61% YoY) has dropped more than the average among the major liners.
OOIL’s 1H23 earnings fell 74% HoH. Earnings are still very good comparing to historical average. RoE was still stayed close to 20% despite of the large sum of idle assets (e.g. cash) on balance sheet. 74% sequential drop in earnings are a touch better than the industry average which is 83% HoH fall. OOIL’s unit costs fell 17% HoH relative to the industry’s average 11% HoH fall.
Wan Hai reduced EBIT losses by 37% QoQ in 2Q 2023. Like ZIM, Wan Hai also suffer from over-exposure on the weak Transpacific and Intra-Asia markets but it has been shielded from the rapid decline on the Oceania trades where Wan Hai do not have a presence. Wan Hai’s failure to invest in SOx scrubbers has also impacted its operating margins, with all of its ships using the more expensive LSFO.
Zim recorded its worst quarterly loss since its financial restructuring in 2014, with the 2Q 2023 net loss reaching $213m. ZIM’s EBIT loss expanded in 2Q by 11 times QoQ. Zim’s 2Q EBIT margin of -11.2% places it at the bottom of the earnings league table comprising of 10 of the top 12 carriers, with Zim the worst of the 3 carriers that dropped into loss making territory along with Wan Hai (net loss of $76m) and Yang Ming (net loss of $4m). Low operating efficiency and high charter expenses have
HMM’s liner EBIT fell 43%, which is broadly in line with the peers, as fall in freight rates off set increase in volume on the top line. HMM’s volume were up 12% QoQ, similar to CMA CGM and ONE, but is way ahead of Maersk and OOCL (+7% QoQ) and Hapag Lloyd (+4% QoQ).