Hapag-Lloyd has recorded good half year results despite a decline in transport volume and remaining uncertainties surrounding the COVID-19 pandemic.
Although transport volumes fell 4%, down to roughly 5.8m teu in 2020 from 5.9m in the first half of 2019, Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) increased year-on-year to US$1.29bn.
Group profit improved from the US$285m recorded in the first half of last year to reach US$563m in the same period this year.
Rolf Habben Jansen, chief executive officer of Hapag-Lloyd AG, said: “After the year got off to a decent start, transport volumes significantly declined in the second quarter as a result of the COVID-19 pandemic.
“We benefitted from the sudden drop in bunker prices, adjusted capacity to lower demand and took additional cost-cutting measures as part of our Performance Safeguarding Programme (PSP). On the whole, we have a good first half year behind us despite the coronavirus crisis.”
Revenues were down less than 1% year-on-year at apprxomiately US$7bn which has been primarily attributed to the 4% decline in transport volumes.
The second quarter of 2020 saw a decline of roughly 11% year-on-year as a result of the pandemic, although transport volumes slightly increased in the first quarter of the year.
Transport expenses were approximately 4% below the comparable figure for the previous year.
An average bunker price of US$448 per tonne, which is around 4% higher than it was in the same period last year due to the introduction of the International Maritime Organisation’s 2020 fuel regulation, was offset by positive effects from a volume-related decline and active cost management.
The sharply declining bunker prices in the second quarter also had a positive impact on Hapag-Lloyd’s earnings.
At US$1.2bn, free cash flow remained positive and the liquidity reserve was significantly increased in the first half of the year as active measures were undertaken to further strengthen the liquidity position as part of the PSP.
As of the end of June 2020, the liquidity reserve stood at approximately US$1.9bn.
Jansen said: “Thanks to the wide range of measures we have introduced in recent months, we are still on track.
“Our focus will remain on the safety and health of our employees, but naturally also on safeguarding the supply chains of our customers worldwide.”
The company aims to advance its PSP and to implement its 2023 in addition to keeping a close eye on the future course of the COVID-19 pandemic to ensure it can flexibly react to any changes.
Jansen added: “On the whole, the pandemic is and will remain a major source of uncertainty for the entire logistics industry.”
Hapag-Lloyd’s forecast remains unchanged and, for the current financial year, it expects an EBITDA of €1.7bn (US$1bn) to €2.2bn (US$2.6bn) and an EBIT of €5m (US$591.6m) to €1bn (US$1.18bn).
However, due to the COVID-19 pandemic and the economic repercussions it has had in many parts of the world, the forecast will remain subject to considerable uncertainty.
The development of transport volumes, freight rates and a further potential increase in bunker prices should also have a significant impact on Hapag-Lloyd’s results in the second half of the 2020 financial year.