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Strong earnings for Hapag-Lloyd in Q3 2020

Strong earnings for Hapag-Lloyd in Q3 2020
Rolf Habben Jansen, Hapag-Lloyd CEO

Volume recovery, stable freight rates and low bunker prices have contributed toward strong earnings for Hapag-Lloyd in the third quarter of 2020.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) have increased 20.4% year-on-year to US$2bn while earnings before interest and taxes (EBIT) has risen to  965m.

The Group net result increased by US$272m year-on-year to US$605m, although revenues for the first nine months of the year were 1% lower than 2019 at around US$10.5bn.

The drop in revenue can primarily be attributed to pandemic-related effects, including a double digit drop in demand in the second quarter and overall transport volume that was 3.5% lower than the prior year figure at 8.698m teu.

The average freight rate was up 2% to 1,097 USD/teu and transport expenses decreased more proportionately by 6% due to a combination of lower transport volumes, a lower average bunker price of US$402 per metric tonne and rigorous cost management.

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

“However, with its increasing number of cases worldwide, the COVID-19 pandemic continues to pose high risks to the logistics industry and the supply chains for our customers.”

The company intends to stick to its present course, continuing to implement its Strategy 2023, and keep a close eye on the well-being of its employees as well as the needs of its customers and operating cost.

Hapag-Lloyd, based on the earnings forecast that was adjusted upwards in October, expects an EBITDA of €2.4bn (US$2.8bn) and an EBIT of €1.1-1.3bn (US$1.3-1.5bn) for the full financial year 2020.