German container shipping line Hapag-Lloyd has reported an “extraodinarily strong” start to the year as first quarter, with group profit jumping more than 300% compared to Q1 2021.
Revenues rose in the first quarter of 2022 to $9 billion, up from about $5 in Q1 2021. EBITDA came in at $5.3 billion, compared to $1.9 billion in Q1 2021. The EBIT rose to $4.8 billion, compared to $1.5 billion and the group’s profit climbed to $4.7 billion, up from $1.5 billion last year.
“The year has got off to an exceptionally strong start on the whole, and whilst there have been first signs that the market has passed its peak we also expect a strong second quarter,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.
Hapag-Lloyd said revenue growth can primarily be attributed to much higher average freight rates—$2,774/TEU in Q1 2022 compared to $1,509/TEU in Q1 2021—and a stronger U.S. dollar. However, Hapag-Lloyd’s report noted that the Shanghai Containerized Freight Index (SCFI), which tracks spot freight rates on the major trade routes from Shanghai, was lower at the end of March 2022 than the end of 2021—at $4,434/TEU compared to $5,047/TEU.
Overall, transport volumes were roughly on a par with the prior-year level, at 3 million TEU, but congestion at ports and strained hinterland infrastructures has resulted in longer turnaround times for ships and containers.
The Q1 result was also impacted by “significantly increasing expenses” for container handling and a roughly 60% higher average bunker consumption price, which stood at $613 per tonne in the first quarter compared to $384 in Q1 2021.
Looking ahead, Hapag-Lloyd said it expects the second quarter will exceed earlier forecasts, leading the company’s executive board to upgrade its earnings guidance as previously announced in April.
For the 2022, Hapag-Lloyd now expects EBITDA in the range of $14.5 to $16.5 billion and an EBIT in the range of $12.5 to 14.5 billion. However, Hapag-Lloyd warns that the forecast remains subject to “considerable uncertainty” due to the COVID-19 pandemic and the war in Ukraine.
“Global supply chains continue to be under significant pressure – not least because of the recent measures taken in China in response to COVID-19 outbreaks,” abben Jansen added. “This situation is expected to improve in the second half of the year. For our customers worldwide, we will do everything in our power to help normalise this difficult market environment as quickly as possible. At the same time, we will continue to focus on quality and sustainability and further implement our Strategy 2023.”
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