German container liner Hapag-Lloyd announced a more than 80% increase in operating profit for 2019 compared to the previous year, citing improved freight rates and strict cost control.
The Hamburg-based shipping company reported on February 19 earnings before interest and taxes (EBIT) for the 2019 financial year of EUR811 million (US$876 million), up significantly from EUR444 million in 2018.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to EUR1.986 billion from EUR1.139 billion in 2018.
“The main drivers of the positive business developments have been improved freight rates as well as rigorous cost and revenue management,” Hapag-Lloyd, the world’s fifth biggest operator, said in a statement on preliminary results.
In the fourth quarter of 2019, EBITDA amounted to EUR475 million compared to EUR327 million in the last quarter of 2018, and EBIT reached EUR169 million from EUR144 million.
Revenues in 2019 increased by about 9% to EUR12.6 billion from 2018’s EUR11.6 billion. This is attributed to an improved average freight rate of $1,072 per TEU for the year as a whole, which rose by 2.6% year-on-year (2018: $1,044/TEU) “due to a stronger focus on more profitable trade lanes and active revenue management,” said the statement.
In addition, a 1.4% year-on-year increase in transport volumes, to more than 12 million TEUs, and a stronger US dollar exchange rate against the euro also helped raise revenues.
Hapag-Lloyd is scheduled to publish its 2019 annual report and an outlook for 2020 this March 20.
Photo courtesy of Hapag-Lloyd
