Hapag-Lloyd Improves Half-Year Results Despite Coronavirus Crisis

Hapag-Lloyd presents its half-year results. With an EBIT of 563 million USD (previous year 440 million), the previous year’s result was clearly exceeded. Cash flow is secured for the remainder of the year, and there is a good liquidity reserve. The targets for the annual result will be maintained despite the coronavirus crisis.

(Hamburg) Hapag-Lloyd concluded the first half of 2020 with an earnings before interest and taxes (EBIT) of 563 million USD (511 million Euro), exceeding the previous year’s figure of 440 million USD (389 million Euro). The consolidated result improved to 314 million USD (285 million Euro). At the same time, earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to 1.29 billion USD (1.17 billion Euro).

Caught with Adjustments

“After a decent start to the year, transport volumes significantly declined in the second quarter due to the COVID-19 pandemic. We benefited from suddenly falling bunker prices, adjusted our capacities to the lower demand, and implemented further cost-cutting measures as part of our Performance Safeguarding Program. Overall, we have had a good first half of the year despite the coronavirus crisis,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG. Revenues in the first half of 2020 were around 7.0 billion USD (6.4 billion Euro), which is less than 1 percent below the previous year’s level. A key reason was a transport volume that was about 4 percent lower at around 5.8 million TEU. While the transported volume was slightly increased in the first quarter, there was a pandemic-related decline in transport volume of about 11 percent in the second quarter compared to the previous year. The freight rate improved slightly in the first half of the year to 1,104 USD per TEU.

Good Liquidity

Transport expenses were about 4 percent lower than the previous year’s comparison figure. A 4 percent higher average bunker price of 448 USD per ton due to the introduction of IMO 2020 was offset by positive effects from a volume-related decrease in transport expenses and active cost management as a result of the PSP measures. Additionally, the significantly falling bunker costs in the second quarter positively impacted Hapag-Lloyd’s half-year results. The free cash flow was again significantly positive at 1.2 billion USD (1.1 billion Euro). The liquidity reserve was significantly increased in the first half of the year through measures actively initiated as part of the PSP program to further strengthen the liquidity position, amounting to around 1.9 billion USD (1.7 billion Euro) at the end of June. Rolf Habben Jansen: “Thanks to the various measures we have implemented in recent months, we remain on track. The focus remains on the safety and health of our employees, but of course also on securing the supply chains of our global customers. We will continue to advance our Performance Safeguarding Program and implement our Strategy 2023. We will closely monitor the further course of the COVID-19 pandemic and respond flexibly to market changes. The pandemic remains a significant uncertainty factor for the entire logistics industry.”

Forecast for Annual Results Remains Unchanged

Looking ahead, the earnings forecast remains unchanged. For the current financial year, an EBITDA of 1.7 to 2.2 billion Euro and an EBIT of 0.5 to 1.0 billion Euro are expected. In light of the COVID-19 pandemic and the associated economic consequences in many parts of the world, the forecast remains subject to significant uncertainties. In addition to the development of transport volumes, the development of freight rates and a further potential increase in bunker prices are likely to have a significant impact on Hapag-Lloyd’s results in the second half of the financial year 2020.

Details on the Report

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