2023 profitability of container carriers near pre-pandemic levels
ZIM, Yang Ming and Wan Hai recorded EBIT losses in FY2023; four shipping lines had EBIT of over $1bn
Shipping lines saw sharp Y/Y decline in revenues, ranging between 47 percent and 63 percent in FY2023.
"However, the annualised revenue growth rate in FY2023 is in line with 2018-2019, which suggests that the sharp Y/Y revenue decline in FY2023 is an artefact of the abnormal revenue growth of 2021-2022, rather than a fundamental revenue loss in 2023," says the latest update from Sea-Intelligence.
ZIM, Yang Ming and Wan Hai recorded EBIT losses in FY2023, the update added. "While four shipping lines had an EBIT of over $1 billion, what is clear is that profitability levels are nowhere near those in 2021-2022. EBIT per TEU is one way to visualise profitability. Figure 1 shows EBIT for 2010-2023 and shows the unprecedented levels of the 2021-2022 pandemic period whereas Figure 2 cuts off the y-axis at +/- 300 USD/TEU, to show the developments in 2023."
So far, EBIT/TEU data is available for five shipping lines (COSCO and OOCL haven’t published yet and CMA CGM does not publicly publish EBIT anymore), says the update. "Although Maersk’s EBIT/TEU of $94/TEU is significantly lower than in 2021-2022, it is still higher than most of the pre-pandemic years. For Hapag-Lloyd, ($235/TEU), it is the highest outside of 2021-2022. For ONE ($116/TEU), we do not have a pre-pandemic reference point while for HMM, their FY2023 EBIT/TEU of $119/TEU is lower than in 2020 but is still better than in 2011-2019 (where they were not profitable at all). ZIM’s EBIT/TEU of -$765/TEU is driven by a non-cash impairment loss of $2.06 billion recorded in the third quarter.”
Outlook
Maersk expects an underlying EBITDA of $1-6 billion and an underlying EBIT of $-5-0.0 billion for 2024 with front-loading towards the start of the year.
Hapag-Lloyd expects group EBITDA to be in the range of $1.1-3.3 billion and EBIT to be in the range of $ (-)1.1 billion to $1.1 billion. "However, this forecast remains subject to considerable uncertainty given the volatile development of freight rates and geopolitical challenges."
ZIM expects to generate an adjusted EBITDA between $850 million to $1.5 billion, and adjusted EBIT between a loss of $300 million and earnings of $300 million in 2024.
