SCS announced weak Q1 2023 results with revenue and NPAT-MI plunging 34% and 40% YoY, respectively. These results are in line with our expectation and achieve 19% and 18% of our respective full-year forecasts as in our last Update Report, dated April 13, 2023. We do not foresee significant changes to our forecasts, pending a fuller review.

SCS’s international cargo volume dropped 45% YoY in Q1 2023 due to weak orders for Vietnamese exports as well as Q1 2022’s high base. Vietnam’s electronics exports fell 11% YoY and apparel & textile exports dropped 17% YoY in Q1 2023. As trade activities in Vietnam have softened from the global slowdown, maritime container shipping prices have returned to pre-COVID levels, rendering air cargo less competitive YoY.