Indian Transport & Logistics

Carriers' earnings drop to pre-pandemic levels

COSCO reports largest EBIT/TEU of $289 in Q32023 followed by Hapag-Lloyd with $64 and HMM with $52

Carriers earnings drop to pre-pandemic levels
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All major shipping lines that report financial results have recorded sharp YoY revenue drops in Q32023. "In fact, the smallest contraction was of -51.8 percent," according to the latest report by Sea-Intelligence. "While this does sound alarming, we have to remember that the YoY comparison is against a period of high rates.

"To counter this volatility, we instead compare Q32023 against 2019 on an annualised basis, and see that the contraction in Q3 is an artefact of the abnormal growth in 2021-2022. The revenues are now really only dropping to the pre-pandemic levels.

"Figure 1 gives an overview of the EBIT/TEU. After the extraordinarily highs of 2021-2022, in Q32023, we see EBIT/TEU drop in line with the pre-pandemic years."

COSCO has been doing well, recording the largest EBIT/TEU of $289 followed by Hapag-Lloyd with $64 and HMM with $52. Maersk recorded the smallest negative EBIT/TEU of $4 whereas ZIM recorded a significant negative EBIT/TEU of $2,625 (with an EBIT loss of $2.28 billion). For ZIM, a large part of this is driven by a non-cash impairment loss of $2.06 billion, the update added.

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