Compañía Sud Americana de Vapores (VAPORES) Q4 2023 earnings summary

Executive summary

• 2023 net income was ThUS$258,099, down from ThUS$5,563,209 in 2022, reflecting lower equity-accounted earnings from Hapag-Lloyd AG and a ThUS$677,398 tax expense.

• Hapag-Lloyd AG contributed ThUS$947,024 in earnings; excluding the significant tax expense, net income would have been $1bn.

• KPMG issued an unmodified audit opinion, stating the consolidated financial statements comply with IFRS Accounting Standards.

Financial highlights

• Profit before tax was ThUS$935,497 versus ThUS$5,314,116; income tax expense was ThUS$677,398 versus a ThUS$249,162 tax benefit in 2022.

• Total assets were ThUS$8,268,657 at year-end, down from ThUS$10,296,575; equity was ThUS$8,088,551 versus ThUS$7,914,497.

• Cash and cash equivalents rose to ThUS$278,304 from ThUS$97,197; operating cash flow was negative ThUS$708,971 and investing cash flow was positive ThUS$3,248,248.

• Current tax assets increased to ThUS$1,526,400 from ThUS$513,800.

Outlook and guidance

• Hapag-Lloyd AG forecast slightly higher transport volume, clearly lower average freight rates and bunker prices, EBITDA of $4.5bn-$5.5bn and EBIT of $2.4bn-$3.4bn for 2024.

• A solid start to 2024 was expected, but challenging market fundamentals and geopolitical risks weighed on earnings; a large share of projected earnings was expected in H1.

• Guidance remained highly uncertain amid Red Sea, Panama Canal, Ukraine and Israel risks, freight-rate volatility, inflation and rising vessel capacity.