The Ernst Russ Group has revised its earning forecast upwards for the full year, citing improved market conditions for its 31 container ships.
The Frankfurt and Hamburg-listed company said on Thursday it expects full-year 2023 group revenue to come in between €190m ($207m) and €210m and operating Ebit earnings at between €70m and €90m.
Ernst Russ’ new revenue forecast is €10m over the previous one made by the company in March. The revised Ebit forecast lies €13m higher.
In a message to investors, chief executive officer Robert Gartner attributed the improved outlook to the “continued positive performance and the largely secure employment situation of the ER Group fleet for the 2023 financial year”.
The charter market for container vessels may be “very significantly below the exceptional [2022] highs”, the company admitted in its second-quarter earnings release.
However, “stabilisation took place” in the final months of the quarter, improving the overall market environment, it added.
This is reflected in a 14% year-on-year revenue increase in the first six months to €96.4m, according to company figures.
Operating Ebit earnings, by contrast, took a 46% dive to €27.6m — mostly because the company did not repeat vessel sale receipts it booked last year.
Reported net income after minority interests declined by nearly a third to €17.6m.
Ernst Russ owns and operates a fleet of around 31 vessels, most of which are smaller container ships with a capacity of between 700 teu and 6,600 teu.
The company has been looking to rejuvenate and enlarge its ageing fleet after reporting a threefold increase in profits in 2022.
Improving outlook
Possibly encouraged by the improving outlook, Ernst Russ announced in July its biggest container ship purchase to date with the acquisition of the 13,371-teu Rome Express (built 2010), which has become the largest vessel by far in its fleet.
Shareholders seem to agree with the strategy.
For the first time, the Ernst Russ Group earlier this year offered shareholders the option to receive dividends in cash or in the form of new shares.
Seventy-one per cent of eligible shareholders opted for the new shares, Gartner said on Thursday.
A 38.7% stake in the Ernst Russ Group was controlled as of 30 June by German entrepreneur Jochen Thomas Dohle. Other minority interests are represented by JaJo Beteiligungsgesellschaft, which has a 9.2% stake, and MS Cordula Schiffahrtsgesellschaft which owns 6.5%.
The company’s remaining shares are in free float.
