Samudera had a banner year in 2022 because its earnings were boosted by high freight rates. According to its annual report, average freight rates for FY2022 ended December 2022 were significantly higher compared to FY2021, even after accounting for some softening in rates towards the final quarter of the year. In addition, container volume handled by Samudera rose by 28.5% y-o-y in 2022. Hence, revenue for Samudera’s container shipping segment rose 88.8% to US$963.4 million ($1.28 billion), from US$510.3 million a year ago.
A share buyback announcement on April 11 by Samudera Shipping Line was followed by a jump in Samudera’s share price and trading volume. Is this justified? Not really. Here’s why.
Going by the chart of WCI Composite Container Freight Benchmark Rate per 40-foot Box Drewry, it appears that freight rates are declining, and this year’s freight rates are set to be lower than 2022’s rates.
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