Until 18 December 2023, the Drewry Port Equity Index grew by a modest 1.6% YTD, a stark contrast to the impressive surge of 23.5% seen in the S&P 500 index. During this period, stock prices of Global Terminal Operators (GTOs) rose by 6.6%, slightly tempered by a 4.9% decline in those of Regional Terminal Operators (RTOs). Looking at the QTD performance, the Drewry Port Equity Index increased by 8.0%, aligning somewhat with the broader S&P’s growth of 10.6%. Both GTOs and RTOs remained positive, marking growth of 13.9% and 0.3%, respectively. In October 2023 Drewry Global Container Port Throughput Index declined by 3.4% MoM reaching 108.8 points (+1.9% YoY). Predictions suggest a slight 0.6% MoM and 2.0% YoY increase in November 2023.

The recent rally in stock prices during the QTD was propelled by comments from the Fed Chair Jerome Powell, who expressed confidence that US rate hikes were likely concluded. He hinted at potential rate reductions ahead, projecting that policymakers will implement cuts totalling 75 basis points in 2024. Recent actions by major central banks underscore a divergence in their future interest rate trajectories. While the European Central Bank (ECB) and the Bank of England (BOE) have maintained static interest rates, both signalled an intent to sustain higher rates for an “extended period”, diverging from the recent indications from the Fed. • Despite the surge, the industry’s EV/EBITDA valuation stays below its historical average, prompting targeted investment approaches over broad sectoral ones.

ICTSI, Liaoning ports, HHLA, Westport and Santos Brasil disclosed their revenue statistics in 3Q23, collectively demonstrating a 2.7% average YoY growth in dollar terms. This coincided with the 5.8% surge in their combined EBITDA, resulting in an escalated margin of 45.1%, up from 43.4% in 3Q22.

In 3Q23, notable fluctuations persisted in quarterly capex spending, marking a 128.2% YoY rise in average expenditure, albeit from a limited data set including ICTSI, HHLA, Westports and Santos Brasil. ICTSI led with USD 145.9mn spent (vs 3Q22: USD 26.6mn), mainly for expansion projects and equipment. HHLA’s spending also surged 125.1%, with capex of EUR 110.7mn (USD 120.4mn) in the quarter while Santos Brasil’s Container and General Cargo Terminal segment saw a 54.3% decrease in spending to BRL 39mn (USD 8.0mn) primarily on new machinery.

According to the recent update, MSC and the City of Hamburg have acquired a significant 92.3% stake in HHLA, marking progress toward privatisation. While this deal is pending regulatory approval, it is expected to be completed by 2Q24. The plan involves MSC owning 49% and Hamburg owning 51%, with HHLA maintaining management control despite the majority ownership change.
Source: Drewry