German liner company Hapag-Lloyd has posted a $3.3 billion profit in the first half of the year amid “very strong demand” for container shipping that isn’t expected to let up any time soon.
The company today released its first half year results, reporting EBITDA of $4.2 billion and EBIT $3.5 billion. Group profit came in at $3.28 billion, up over 1,000% from the first half of 2020 at the onset of the COVID-19 pandemic. Second quarter profit came in at $1.8 billion.
Revenues in the first 6 months of 2020 increased by approximately 51%, to $10.6 billion, mainly because of a 46% increase in average freight rates compared to the same period last year. The company said the freight rates are the result of “high demand combined with scarce transport capacities and severe infrastructural bottlenecks.”
Transport volumes were up 4% higher than the comparable figure for the previous year, which was impacted by a slump in demand in the second quarter due to the COVID-19 pandemic. In addition, a roughly 6% lower average bunker consumption price, which amounted $421 per tonne in the first half.
Hapag-Lloyd said while demand remains high in the current “congested market environment,” this is leading to a shortage of weekly transportation capacity. For this reason, Hapag-Lloyd expects earnings to remain strong in the second half of the financial year, the company said. EBITDA for the full year is expected to be in the range of $9.2 to $11.2 billion and EBIT to be in the range of $7.5 to $9.5 billion.
“We are naturally pleased by this extraordinary financial result. But the bottlenecks in the supply chains continue to cause enormous strains and inefficiencies for all market participants and we have to do our utmost to resolve them jointly as soon as possible,” said Rolf Habben Jansen, Hapag-Lloyd’s CEO. “Looking at the market environment today, we however do not believe that the situation will return to normal any time soon – despite all the efforts made and the additional container box capacity that is being injected. We currently expect the market situation only to ease in the first quarter of 2022 at the earliest.”
Hapag-Lloyd is one of the world’s leading liner companies with a fleet 250 containerships and a total transport capacity of 1.8 million TEU. It also has a container capacity of approximately 2.8 million TEU, including one of the largest and most modern fleets of refrigerated “reefer” containers.
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