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Result significantly increased despite coronavirus pandemic
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Successful cost reductions and higher freight rates drove growth
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Significant increase in earnings also expected for 2021
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Pandemic-related risks remain for the time being
German box carrier Hapag-Lloyd announced net results of around US$1.1 billion in 2020, up 155.4% from 2019, but did not give a specific earnings outlook for 2021, citing the uncertainty brought by the coronavirus pandemic.
Earnings before interest, taxes, depreciation and amortization (EBITDA) last year increased to more than $3 billion, while earnings before interest and taxes (EBIT) rose to roughly $1.5 billion.
The main drivers of the “very successful financial year” were cost savings of more than $500 million as well as slightly improved freight rates and lower bunker prices, the carrier said in a statement.
Revenues last year increased by around 3% to about $14.6 billion, mainly owing to a roughly 4% increase in the average freight rate.
Transport volumes at the end of the year were slightly below the level of the previous year, at 11.8 million TEUs or -1.6%, but clearly above the level anticipated at the beginning of the pandemic.
After transport volumes plummeted in the second quarter, the carrier was able to benefit from unexpectedly strong demand for container transports in the second half of the year.
“Therefore, we have concluded the year with a much better result than that of 2019, and after the significant improvements achieved in previous years, we have been able to earn our cost of capital for the first time in a decade,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.
Looking ahead, the shipping liner expects EBITDA and EBIT for 2021 to clearly surpass the prior-year level. This is based on assumptions that the transport volume will slightly increase and the average freight rate and average bunker consumption price will significantly increase compared to the previous year.
This forecast remains subject to considerable uncertainty due to the above-average volatility of freight rates and operational challenges such as infrastructural bottlenecks.
“In addition, the further course and corresponding economic impacts of the coronavirus pandemic cannot be predicted at present. Accordingly, a detailed earnings outlook is not possible at this time,” said Jansen.
He added: “2021 will also be dominated by the global coronavirus pandemic, and the current supply chain bottlenecks will presumably only abate significantly in the second half of the year. Thanks to continuing strong demand for consumer goods, we have gotten the current financial year off to a very positive start.”
However, the pandemic-related risks will remain for the time being, even if vaccination campaigns across the world hint at the first steps towards normalization, he added.
Photo courtesy of Hapag-Lloyd
