Top Global Carriers to Post Profit

Analyzing the latest financials from the dozen leading container lines, SeaIntel said the results revealed a considerably “more positive picture than the horrendous second quarter of 2016”.

News ID: 76153

Date: 09 September 2017 - 12:00

According to MANA, Ten carriers posted profits in the April-June quarter, with only two – Hyundai Merchant Marine and MOL – recording losses. HMM made a loss of $81.8m in the quarter, having posted losses in six of the previous eight second quarters, while MOL reported a loss of $55.1m in the period and has now recorded losses in the past seven second quarters.

“On the other hand, despite the revenue and volume loss from the cyber-security incident, we see an outstanding financial result from Maersk Line in 2017 second quarter, recording earnings before interest and tax of $376m, more than three times the segment profit of second-best-performing Cosco at $122m,” said a note from SeaIntel shipping analyst Imaad Asad. “The remaining eight carriers all had 2017-Q2 operating profits of less than $100m.”

Cosco showed the strongest revenue growth, with a 47.3% year-on-year increase in the latest three months.”.

Evergreen and HMM followed Cosco, reporting the second and third-largest year-on-year revenue increases, of 30.3% and 30.1%, respectively.

“Maersk Line, Hapag-Lloyd, OOCL, Yang Ming, and Zim all saw their revenues grow 20%-25% year-on-year in the second quarter, and much of this revenue growth is likely to be a consequence of the Hanjin bankruptcy, because the Korean carrier was still in operation in the 2016 second quarter,” said the note. “The remaining four carriers, Wan Hai and the three Japanese carriers, all saw much lower revenue growth of around 10% year-on-year.”

SeaIntel said all 12 carriers had improved their second quarter profits/loss situation in 2017 over 2016, with Maersk Line reporting the greatest net recovery, turning a $123m loss into a $376m ebit profit.

“Cosco has seen the second-best profit improvement over 2016-Q2, at $381m,” said the note. “The remaining carriers have all seen an improvement of less than $200m.”

Wan Hai, the only carrier to have consistently made a profit in every second quarter for the past six years, is the line that has seen the smallest improvement, of just $18mj, in in the 2017 second quarter.

In a separate note from Drewry Maritime Financial Research, the analyst said that Hapag Lloyd’s revenue increase of 28% year-on-year in the latest quarter included €199m of revenue contributions from UASC, which completed its merger with the German line in May.

Drewry also noted that Hapag Lloyd’s volume in the quarter was reported at 2.3m teu, and its revenue per teu came in at $1,064 per teu – up 21% and 4% year-on-year, respectively. “On a standalone basis, Hapag-Lloyd’s volume growth of 8% was the highest among major operators,” said Drewry.

Drewry said Hapag-Lloyd’s bargaining power had improved significantly owing to its membership of The Alliance, which started operations in April, and this would help its financial performance over the rest of the year.

“This new alliance, along with the increased level of consolidation more generally seen in the industry, has returned the bargaining power to the liner operators,” said Drewry.