HAMBURG : Germany container shipping company Hapag-Lloyd reported strong start to the year with a net profit of $1.45 billion in the first quarter.
This compares to a net profit in the first quarter of 2020 of $27 million for a 1423% increase.
“On the back of the high demand for container transports, we have benefited from better freight rates, especially in the spot market. On top of that, bunker prices have been lower than in 2020. As a result, we concluded the first quarter with a very positive financial result and look back overall on a solid start to the year,” said Rolf Habben Jansen, CEO of Hapag-Lloyd.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first quarter was reported as $1.9 billion, while earnings before interest and taxes (EBIT) rose to roughly USD 1.5 billion, both up about 1300% compared to last year. Revenues increased in the first quarter by around 33% to roughly $4.9 billion, particularly due to a higher average freight rate, which increased by approximately 38 percent to reach 1,509 USD/TEU compared to 1,094 USD/TEU in Q1 2020. Transport volume was down 2.6% on the quarter.
“Nevertheless, due to the demand-related congestion of port and hinterland infrastructures in many places as well as to a resulting shortage of freely available ships and containers, the transport volume was slightly below the level of the same quarter of the prior year, at roughly 3.0 million TEU (Q1 2020: approximately 3.1 million TEU), or minus 2.6 percent. On the other hand, a roughly 27 percent lower average bunker consumption price, which amounted to USD 384 per tonne in the first three months of the 2021 financial year (Q1 2020: USD 523 per tonne), had a positive impact on earnings,” Hapag-Lloyd said.
Hapag-Lloyd also confirmed its outlook for 2021, with EBITDA and EBIT expected to “clearly surpass the prior-year level.” The company see the current market situation continuing in the second quarter before a “gradual” normalization in the second half of the year.
“While the positive earnings trend is likely to continue in the second quarter of 2021, a gradual normalisation is currently expected in the second half of the year. However, this forecast remains subject to considerable uncertainty due to a number of factors, including: the above-average volatility of freight rates at this time; operational challenges, such as infrastructural bottlenecks; and the inability to predict the future course or economic impacts of the COVID-19 pandemic,” Hapag-Lloyd said in its release.
Rolf Habben Jansen added:
“While we remain optimistic for 2021 as a whole, the ramifications of the COVID-19 pandemic and the congested supply chains continue to present a huge challenge to all market participants. We will do everything in our power to help normalise this difficult market environment as quickly as possible and make as much capacity available as possible. We will also double down on our efforts to provide the best possible service quality to our customers – as we know that we can and must still do better on that front – and we will continue to implement our Strategy 2023.”
Hapag-Lloyd’s fleet currently consists of 241 modern container ships for a total transport capacity of 1.7 million TEU, making it the 5th largest liner shipping company with about 7% share of the global market, according to Alphaliner.