Hapag-Lloyd Reports Significantly Improved Group Results in 2019

Hapag-Lloyd has presented its business figures for the year 2019, showing a significantly improved group result of 418 million USD. A dividend of 1.10 euros per share is proposed. However, the outlook for the current financial year is clouded by the Corona crisis.

(Hamburg, 20.03.2020) Hapag-Lloyd today published its audited business figures for the year 2019. In the reporting year, the group result improved significantly to 418 million US dollars (373 million euros).

“Today we are faced with rapid changes and uncertain times. However, this cannot overshadow the fact that the year 2019 was very good for Hapag-Lloyd. We benefited from higher transport volumes and better freight rates, kept our costs firmly in check, and significantly reduced our financial debts. We also continued to implement our Strategy 2023 and achieved a group result that is well above the previous year’s level,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.

Higher Revenues
The revenues increased by about 3 percent in the financial year 2019 to 14.1 billion US dollars (12.6 billion euros). The main reason was a better average freight rate of 1,072 USD/TEU. Due to a stronger focus on more profitable shipping areas and active revenue management, it was 2.7 percent above the previous year’s figure. The revenue was also positively impacted by a 1.4 percent increase in transport volume to more than 12 million TEU. Lower handling and inland transport costs for containers, the slightly lower average bunker consumption price of 416 USD/t, and the first-time application of the accounting standard IFRS 16 eased the transport costs, which amounted to a total of 10.9 billion US dollars (9.7 billion euros).

In 2019, nearly 1 billion US dollars (more than 800 million euros) in financial debts were repaid (excluding IFRS 16), significantly reducing financing costs in the second half of the year. The dynamic debt ratio (net debt to EBITDA) decreased to 3.0x, thus falling below the target of 3.5x set for the year 2019.

Against this background, the Board of Directors and the Supervisory Board of Hapag-Lloyd AG decided to propose to the Annual General Meeting a dividend of 1.10 euros per share for the financial year 2019.

Uncertain Outlook for the Financial Year 2020
Hapag-Lloyd expects an EBITDA of 1.7 to 2.2 billion euros and an EBIT of 0.5 to 1.0 billion euros for the year 2020. However, this forecast for 2020 is particularly burdened by the outbreak of the coronavirus, which carries significantly higher uncertainties than usual. After a solid start to the year 2020, global container transport volumes are affected by the coronavirus crisis, but the exact impacts cannot yet be determined at this time. However, Hapag-Lloyd expects that adjustments to the transport capacity provided in the coming months may need to be made in response to lower demand due to the coronavirus. The full extent of the coronavirus outbreak cannot be conclusively assessed at this time. However, Hapag-Lloyd assumes that this will at least affect the earnings development in the first half of 2020.

“2020 will be a very unusual year, as conditions have changed very rapidly in many markets in recent weeks due to the outbreak of the coronavirus. After the initial shock, markets in China and other Asian countries have likely recovered faster than many feared – but now other continents are also affected, and the impacts will be significant. In the coming weeks and months, we will primarily focus on three things that are particularly important to us: the safety and health of our employees, the stability of our customers’ supply chains, and financial precautions that we will take against the storm if it lasts longer than expected,” said Rolf Habben Jansen.

Photo: Hapag-Lloyd

Details on the annual report for the year 2019 can be found at:
https://www.hapag-lloyd.com/de/ir/publications/financial-report.html
https://www.hapag-lloyd.com