Cost savings and higher revenues as freight rates soared through greater demand have bolstered Hapag-Lloyd’s 2020 returns, as with other carriers, volumes overall fell but earnings soared by 65%.
[s2If is_user_logged_in()]The German carrier reported increased earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$3 billion (€2.7 billion) and improved net results of US$1.1 billion (€935 million), while revenues increased by around 3% year-on-year, to US$14.6 billion (€12.8 billion) and earnings before interest and taxes (EBIT) rose to US$1.5 billion (€1.3 billion).
The main drivers, according to Hapag-Lloyd, were cost savings of more than US$500, million (€450 million), including lower bunker prices, as well as improved average freight rates of 4%, to US$1,115/TEU.
“After transport volumes plummeted in the second quarter, we were able to benefit from unexpectedly strong demand for container transport in the second half of the year,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG, who went on to comment, “Therefore, we have concluded the year with a much better result than that of 2019, and after the significant improvements achieved in previous years, we have been able to earn our cost of capital for the first time in a decade.”
In the meantime, the transport volumes at the end of the year were slightly below the level of the previous year, at 11.8 million TEU instead of 12.0 million TEU in 2019, “but clearly above the level anticipated at the beginning of the pandemic,” noted the Hamburg-based line.
The executive and supervisory boards of Hapag-Lloyd AG are proposing a dividend of €3.50 per share be paid out for the 2020 financial year, in light of the encouraging financial results.
Moreover, Hapag-Lloyd expects improved figures again for the 2021 financial year, as they anticipate an increase in transport volumes, a significant growth in the average freight rate and a noteworthy boost in the average bunker price. However, the German company said it is not in position to publish a detailed earinings outlook at the moment, as the forecast remains uncertain due to a number of factors.
“2021 will also be dominated by the global coronavirus pandemic, and the current supply chain bottlenecks will presumably only abate significantly in the second half of the year. Thanks to continuing strong demand for consumer goods, we have gotten the current financial year off to a very positive start,” added Jansen, while Hapag-Lloyd’s boss concluded, “the pandemic-related risks will remain for the time being, even if vaccination campaigns across the world hint at the first steps towards normalisation.”
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