Hapag Lloyd’s annual report confirms significant growth in 2020

On Thursday, March 18, Hapag-Lloyd published its annual report with audited business results for the financial year 2020. According to the report, Hapag-Lloyd’s earnings before interest, taxes, depreciation, and amortization ( EBITDA) increased to more than US$ 3 billion (approximately EUR 2.7 billion). Earnings before interest and taxes (EBIT) increased to around US$ 1.5 billion (approximately EUR 1.3 billion). The Group’s net profit improved to around US$ 1.1 billion (EUR 935 million). The main drivers were cost savings of more than US$ 500 million (approximately EUR 450 million), as well as a slight improvement in freight rates and lower bunker prices.

“In 2020, our business was heavily influenced by the coronavirus pandemic. But we took the initial countermeasures on the cost side and successfully implemented our Performance Protection Program. After shipping volumes plummeted in the second quarter, we were able to benefit from an unexpectedly strong demand for container shipping in the second half of the year. Therefore, we ended the year with a much better result than in 2019 and, after the significant improvements achieved in previous years, we were able to realize our cost of capital for the first time in a decade, ”said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.

Revenues increased in the financial year 2020 by about 3%, to roughly US $ 14.6 billion (approximately EUR 12.8 billion). This is mainly due to an increase of about 4% in the average freight rate, to US$ 1,115 / TEU (2019: US$ 1,072 / TEU). Transport volumes at the end of the year were slightly below the level of the previous year, at 11.8 million TEU (2019: 12.0 million TEU) or 1.6% less, but clearly above the level anticipated at the beginning of the pandemic.

As a result, the Executive Board and the Fiscal Council of Hapag-Lloyd AG decided to make a proposal at the Annual General Meeting that a dividend of 3.50 euros per share be paid for the 2020 financial year.

Looking ahead, Hapag-Lloyd expects EBITDA and EBIT for the 2021 financial year to clearly exceed the level of the previous year. This is based on the assumption that the volume of transport can be slightly increased and the average freight rate significantly increased compared to 2020. In addition, a significant increase in the average bunker consumption price is expected. This forecast remains subject to considerable uncertainty due to a number of factors, including the above-average volatility of freight rates at the moment and operational challenges, such as those caused by infrastructure bottlenecks. In addition, the future course and corresponding economic impacts of the coronavirus pandemic cannot be predicted at this time. Consequently, a detailed profit outlook is currently not possible.

“2021 will also be dominated by the global coronavirus pandemic, and supply chain bottlenecks will presumably only decrease significantly in the second half of the year. Thanks to the continued strong demand for consumer goods, we started the current financial year on a very good note. However, the risks related to the pandemic will remain for the time being, even though vaccination campaigns around the world indicate the first steps towards normalization. Overall, we are following our current course: offering our customers the best possible quality of service and continuing to grow profitably, ”said Rolf Habben Jansen.

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