Evergreen: Profits Plunge Q3 versus 2022 but resilient on a Q vs Q basis

Evergreen: Profits Plunge Q3 versus 2023 but resilient on a Q vs Q basis

In a financial report, Evergreen Marine (EMC), Taiwan’s largest carrier, witnessed a substantial 92% drop in operating profits for the third quarter of the year compared to the same period last year. The operating profit plummeted to TWD 8.8 billion (USD 272.9 million), painting a challenging picture for the company in the face of ongoing industry challenges, according to sources.

Despite the concerning dip in operating profits, Evergreen Marine’s revenue for Q3 stood at TWD 72.8 billion, marking a 57% year-on-year decline. However, the company managed to show resilience by recording an 8% increase in revenue on a quarter-on-quarter basis.

In an unexpected turn of events, Evergreen reported a net profit of TWD 21.9 billion (USD 680 million) attributable to the owners of the parent company for the quarter. This figure more than doubled the results from the first half of 2023. The company attributed this surprising result to unspecified gains on non-operating activities, providing a silver lining amidst the financial challenges.

In a move that sets Evergreen apart, the Taiwanese carrier has become the first to confirm surcharges for 2024 to offset the costs associated with the EU Emissions Trading System (ETS), set to be implemented on January 1st. While preliminary indications from other carriers had surfaced earlier, Evergreen is taking a proactive stance.

The ETS surcharges, applicable from the ‘onboard date’ starting January 1st, except for US loadings where the ‘gate date’ will be considered, are set to be reviewed annually. However, the carrier reserves the right to make changes earlier with prior notice or instruction.

Comparing the rates, Evergreen’s surcharge aligns closely with earlier indications from CMA CGM, quoting a potential EUR 27 per TEU for the Asia/Europe trade. This contrasts with Maersk’s prediction of a possible EUR 70 per TEU for the same trade and Hapag-Lloyd’s theoretical EUR 12 per TEU. The divergences among carriers raise questions about whether the surcharge will be utilized as a competitive tool in the industry. As Evergreen pioneers this move, the industry will be closely watching to see how other major carriers respond to the challenges posed by the EU Emissions Trading System in the coming year.

Sources: Alphaliner, Evergreen

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