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).
Yang Ming 2Q earnings avoid sequential fall at the EBIT level as sequential fall in revenue was offset by the reduction in operating expense, which is an outliner. Yang Ming led the container liner peers in 13% QoQ reduction in OPEX excluding bunker, depreciation and SG&A, which consists of mainly port handlings and equity repositioning. Among the liners, e.g. Maersk and Hapag Lloyd, that have disclosed port handling expenses, unit costs for this item were down QoQ but the drop is mostly off
Hapag Lloyd reported before market open on 10 August. Hapag Lloyd’s 2Q results suffered second biggest a bigger QoQ fall in EBIT, following ONE’s 67% as Transatlantic head haul freight rates fell by 50% (Source: Xeneta) while CCFI fell only 7% during 2Q. However, Hapag Lloyd remain a leader in the EBIT margin among its container liner peers. What may have been overlooked however is that Hapag Lloyd has been leading its peers in delivering RoE (return on equity) on more efficient capital managem
The three main Taiwanese carriers' July revenue came out flat MoM but remained down 67% YoY. The three liners' aggregate revenue held steady at $1.4 Bn a month which is 70% lower than the cycle peak in January 2022 but remain 40% above the average level before 2020. Long haul trade volumes have rebounded in July based on Linerlytica's capacity and utilization data, but the average freight rates based on the CCFI was down 5% MoM in July. EMC, the Taiwan listed arm of the Evergreen Group, was t
Maersk net profits slipped 47% QoQ in the 2nd quarter of 2023, with the dismal performance of the logistics segment continuing to pull down the Group’s results. Liner EBIT dropped by a lower 39% QoQ in 2Q to $1.97Bn which is higher than earnings in any quarter prior to 2020. Management lifted the lower end of the full year EBIT earnings guidance from $2 Bn to $3.5 Bn but kept the upper end unchanged at $5 Bn. As 1H 2023 EBIT has already reached $4 Bn, the revised FY guidance implies 2H EBIT to
Maersk’s failure to protect its liner market share in the last 3 years has cost it dearly, as it gave up at least $4 Bn in foregone profits that Maersk would have been able to generate if it had maintained its global capacity share at 18% instead of the current 15.5%. In its stead, Maersk has chosen to invest almost $10 Bn of incremental capital in its logistics services since 2020 as it pivoted to the logistics integrator strategy. However, in its latest 2nd quarter financial report, Maersk’s