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Wan Hai lost nearly 70 million yuan! Taiwan’s three major shipping companies released first-quarter results, net profits plummeted 95%

Wanhai loss of nearly $ 70 million! Taiwan's three shipping companies' first quarter results are out, net profit plunged 95 percent

Taiwan’s three largest shipping companies, Evergreen Marine, Yang Ming Marine and Wan Hai Shipping, recently announced the first quarter of 2023 results one after another, Evergreen Marine, Yang Ming Marine net profit plummeted, and Wan Hai Shipping reported a loss.

In the first quarter, Evergreen Marine achieved operating revenue of NT$66.827 billion (US$2.170 billion), compared to NT$170.825 billion in the same period of the previous year, a 61% decline year-over-year; net profit attributable to the owners of the parent company was NT$5.043 billion (US$164 million), compared to NT$101.360 billion in the same period of the previous year, a 95% plunge year-over-year.

 

In April 2023, Evergreen Marine’s operating income reached NT$222.34 billion (approximately US$730 million), down 60.2% year-over-year and up 2.1% sequentially. In short, after falling below NT$20 billion for the first time in February, Evergreen Marine’s monthly revenue stopped falling and rebounded in March, and then rebounded moderately in April.

Despite the sharp decline in results, Evergreen Marine did not stop the pace of capacity adjustment. Recently, the company is launching a tender for 24 16,000 TEU methanol-powered container ship orders, with an investment of about $4 billion.

 

In the current shipping market is facing multiple uncertainties, Evergreen Marine plans to large-scale shipbuilding, from the side to see its market prospects are still more optimistic.

 

Evergreen Marine General Manager Xie Huiquan has clearly stated: “The market is expected to remain at the bottom in the second quarter of 2023, but slightly better than the first quarter, and the market is expected to pick up from June, with a significant improvement in the second half of 2023. We still have confidence in our future operations.”

 

Yang Ming Marine announced its first quarter earnings on the same day, with net profit after tax of NT$3.4 billion, down 94.3% year-on-year, and earnings per share of NT$0.97. Previously, Yang Ming indicated that the Mediterranean route is still highly profitable, and the European line is slightly below the profit level, but Yang Ming’s two lines account for a comparable share, so there should be no problem with the first quarter profit.

 

In April 2023, Yang Ming Shipping achieved operating revenue of NTD 11.04 billion (approximately USD 360 million), down 70.0% year-over-year and 14.6% sequentially. In short, Yang Ming Marine’s monthly revenue seems to deteriorate again, and after stopping the decline in March, the monthly revenue in April was even lower than that in February.

 

Yang Ming Marine achieved operating revenue of NT$36.953 billion (US$1.220 billion) in the first quarter, compared to NT$106.704 billion in the same period of the previous year, down 65% year-over-year; net income attributable to the owners of the parent company was NT$3.401 billion (US$112 million), compared to NT$60.577 billion in the same period of the previous year, a 94% plunge year-over-year.

In this regard, the former chairman of Yang Ming Shipping Xie Zhijian analysis, the first quarter of this year, container shipping companies and the annual long-haul contract rates from May last year to support profits, the new long-haul contract rates in May this year, two-thirds less, and close to the cost price, the next few quarters profit is to see a reduction.

 

Xie Zhijian pointed out that the U.S. National Retail Federation (NRF) estimates that the first quarter of this year, the U.S. import container volume decreased by 23% year-on-year, the second quarter is estimated to decrease by 16%, as the second half of last year, the U.S. import container volume began to decline significantly, so it is estimated that July and August this year will be down 1-2% year-on-year.

 

September figures are not yet available, but it is certain that the volume of cargo will gradually pick up, that is, the emergence of his previously said backwards eating cane phenomenon, but the sugar cane is not sweet, because the volume of cargo pick up does not mean that the price will also pick up, the key factor is that this year’s ship capacity supply is estimated to grow by 8.2%, but demand growth of only about 1.4%.

 

Compared with Evergreen Marine and Yang Ming Marine, although the net profit decreased greatly, but still maintain a profit, while Wan Hai Shipping has a net loss.

 

Wan Hai announced its first quarter earnings on the 10th. In the first quarter, Wan Hai Shipping achieved operating revenue of NT$25.558 billion (about US$830 million), compared to NT$80.503 billion in the same period of the previous year, a 68% plunge; net profit attributable to the owners of the parent company was a loss of NT$2.118 billion (about US$68.78 million), compared to a profit of NT$40.612 billion in the same period of the previous year.

 

This is the second consecutive quarterly loss for Wan Hai Shipping, which posted a loss of NT$40 million (US$1.32 million) in the fourth quarter of 2022, its first loss since the second quarter of 2017.

 

In April 2023, Wan Hai Shipping achieved operating revenue of NT$8.13 billion (approximately US$270 million), down 67.1% year-over-year and down 7.1% sequentially. However, it was still NT$820 million or 11.2% higher than the low point in February.

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