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Hapag-Lloyd posts ample 9-month profit

  • Strong earnings logged in Jan-Sep on the back of volume recovery in Q3, stable freight rates, and low bunker prices
  • Transport volumes were only slightly below prior-year level, thanks to a rebound in the third quarter
  • Average freight rate was up 2% from the previous year, boosting earnings
  • Revenue was down 1% from a year ago due to lower transport volumes

German container shipping giant Hapag-Lloyd reported earnings before interest, taxes, depreciation and amortization (EBITDA) of more than US$2 billion in the first nine months of 2020, a 20.4% increase compared to the prior-year figure.

At the same time, earnings before interest and taxes (EBIT) rose to $965 million, surpassing the prior-year figure of $722 million.

The group net result improved to $605 million, up from $333 million over the previous year, said Hapag-Lloyd in a November 13 statement.

Meanwhile, revenues in the first nine months reached $10.5 billion, which is about 1% below the prior-year figure. This can be attributed to pandemic-related effects, including a double-digit drop in demand in the second quarter. In addition, overall transport volume in the first nine months was 3.5% lower at 8,696 TEUs from the prior-year figure of 9,011 TEUs.

The average freight rate was up 2% to $1,097 per TEU as against $1,075 per TEU in the first nine months of 2019, which had a positive impact on earnings.

Furthermore, transport expenses decreased by 6% due to a combination of lower transport volumes, a lower average bunker price, and rigorous cost management.

“In this nine-month period, we have achieved a good result and strictly managed our costs while at the same time benefiting from improved market conditions in the third quarter,” said Rolf Habben Jansen, CEO of Hapag-Lloyd.

Due to the overall positive performance in the first nine months and the expected stronger demand in the fourth quarter, the earnings forecast was increased on October 15.

Hapag-Lloyd now expects an EBITDA for the full financial year 2020 of EUR2.4 billion ($2.8 billion) to EUR2.6 billion from the previous EUR1.7 billion to EUR2.2 billion. EBIT is seen at EUR1.1 billion to EUR1.3 billion, up from EUR0.5 billion to EUR1.0 billion.

With the increasing number of cases worldwide, the COVID-19 pandemic continues to pose a high risk to the outlook, the carrier said.

Photo courtesy of Hapag-Lloyd

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