Rolf Habben Jansen, chief executive officer of Hapag-Lloyd AG, is expecting the coronavirus pandemic to start affecting Hapag-Lloyd’s results in the second quarter, according to the company’s latest announcement.
“We anticipate that the coronavirus pandemic will have very significant impacts in 2020, beginning in the second quarter,” he stated in the first-quarter report of the German carrier, which saw a significant drop in earnings before interest and taxes (EBIT), but an increase in revenues.
Hapag-Lloyd has announced EBIT of US$176 million for 2020 Q1, which is significantly lower than the corresponding figure last year of US$243 million. Even though revenues increased to US$3.7 billion, recording a 6% gain, mainly due to higher volumes and better freight rates.
At the same time, the Group net result declined to approximately US$27 million, while earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased slightly to US$517 million (€469 million).
“The financial result is below the first quarter of the previous year as we faced higher bunker prices after the new International Maritime Organization (IMO) 2020 rules on 1 January and we had a significant negative bunker stock valuation after the decline in crude oil prices at the end of the first quarter,” commented Hapag-Lloyd CEO.
The Hamburg-based company sees good signs in free cash flow that was clearly positive at US$302 million. Furthermore, the liquidity reserve stood at approximately US$1.2 billion, thereby remaining at a persistently good level.
“We have taken a wide range of measures designed to save an amount in the mid-triple-digit million range to safeguard our profitability and liquidity,” said Jansen. “We adjust our service network to the lower demand and seek savings in all cost categories, from terminal, transport, equipment and network costs to overhead.”
Mediterranean Pacific Service (MPS), Mediterranean Gulf Express (MGX) and Atlantic Loop 4 (AL4) are the latest services of Hapag-Lloyd impacted by the Covid-19 crisis and the German liner company has been forced to implement the following alterations:
Void sailing in Mediterranean Pacific Service (MPS):
MV Seaspan Hamburg 15E25
| ETS Seattle 11 June ETS Vancouver 13 June ETS Oakland 18 June ETS Long Beach 20 June ETS Manzanillo, Mx 24 June ETS Manzanillo, Pa 2 July ETS Cartagena 5 July |
Alternatively the company offers the following:
- from United States and Canada Westcoast ports the AL5 service “NYK Remus” 059E in t/s via Caucedo on the MGX service MV “Allegoria” 15E25 to the Mediterranean
- from Cartagena the MGX service MV “Allegoria” 15E25 performing an extra call ETS 4 July
Blank the former “To Be Named (TBN)” positions of Atlantic Loop 4 (AL4) service as follows:
Westbound
Week 22: ETS Le Havre 4 June ETA Veracruz 18 June.
Week 24: ETS Le Havre 17 June ETA Veracruz 2 July.
Corresponding Eastbound sailings
Week 25: ETS New Orleans 28 June ETA London Gateway 15 July
Week 27: ETS New Orleans 11 July ETA London Gateway 29 July
Alternative Routings:
For cargo destined to and from Houston, you may use the adjacent service AL3.
For your cargoes to all other ports, we can offer you the next AL4 sailing.
Adjustments in the schedule of Mediterranean Gulf Express (MGX) service
Revised departure dates for the month of June
*MV Allegoria will perform an extra call at Cartagena ETS 4 July
The port coverage of the MGX service will remain unchanged.
For cargoes connecting in Cartagena to Latin America HL’s customers can alternatively use the MPS service in the MGX void sailing weeks. For all other destinations the company suggests their customers to defer to the adjacent MGX sailing.
Despite the global uncertainties, the executive board of Hapag-Lloyd has substantiated its earnings forecast from the start of the year. This means that the shipping company still continues to expect EBITDA of € 1.7 to 2.2 billion (US$ 1.8 to 2.4 billion) and EBIT of € 0.5 to 1.0 billion (US$ 0.5 to 1.1 billion) for the current financial year.
“However, unless there is a recovery in demand for container transport services earlier and stronger than expected in the market studies cited in the financial report for the first quarter 2020, the upper end of the forecast ranges is barely achievable from today’s perspective,” stated Hapag-Lloyd.
