Compañía Sud Americana de Vapores (VAPORES) Q2 2024 earnings summary

Executive summary

• Q2 net income was $28.765m, with $135.6m profit before tax and $106.9m of tax expense provisions related to dividends received from abroad.

• H1 net loss was $130.340m versus net income of $347.490m in H1 2023, reflecting lower equity-method earnings and dividend-related tax expense.

• The 30% equity-method investment in Hapag-Lloyd represented 87.77% of assets at June 30, 2024.

• Feller Rate upgraded the credit rating from BBB+ to A-.

• KPMG’s interim review found no material modifications needed for IFRS conformity; it was not an audit and no audit opinion was expressed.

Financial highlights

• H1 income before tax was $207.014m versus $908.147m; income tax expense was $337.354m versus $560.657m in H1 2023.

• H1 share of associates’ and joint ventures’ net income was $230.237m versus $935.490m; net foreign-exchange loss was $28.406m versus $17.920m.

• Hapag-Lloyd H1 revenue was $9.516bn, down 12% YoY; EBITDA was $1.969bn, down 48%; EBIT was $879m, down 68%; group profit was $791m, down 75%.

• Hapag-Lloyd H1 transported volume rose 5% to 6,097 TTEU, while average freight rate fell 21% to $1,391/TEU.

• Total assets were $7.005bn and equity $6.885bn at June 30, 2024, versus $8.269bn and $8.089bn at year-end 2023; cash was $96.890m versus $278.304m.

Outlook and guidance

• On July 9, Hapag-Lloyd raised FY 2024 guidance to EBITDA of $3.5bn-$4.6bn and EBIT of $1.3bn-$2.4bn; transport volume was expected to increase moderately.

• FY 2024 freight-rate outlook improved to a slight decrease, while bunker consumption price was expected to decrease slightly.

• Earnings momentum was expected to improve further in Q3 before slowing toward year-end; outlook remained highly uncertain amid volatile freight rates and geopolitical challenges.