Hapag-Lloyd upgrades earnings forecast amid strong market demand

German container shipping company Hapag-Lloyd has raised its earnings forecast amid better than expected business performance.

For the 2020 financial year, earnings before interest, taxes, depreciation and amortisation (EBITDA) of €2.6 to 2.7 billion, from the previously announced €2.4 to 2.6 billion. Earnings before interest and taxes (EBIT) were raised from EUR 1.1 to 1.3 billion to €1.25 to 1.35 billion.

Hapag-Lloyd said that the new EBIT range includes impairments of approximately €100 million, related to a planned optimisation of the vessel portfolio. The measures were not factored into the previous earnings forecast.

“In the fourth quarter, as well, market demand for container capacities has continued to be surprisingly strong and today we are deploying every available ship. Additionally, we are on track with the cost savings from our Performance Safeguarding Program. Given these circumstances, the results of the current financial year will exceed our previous forecasts,” said Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd.

“In light of the global pandemic, we will continue to keep a close eye on the safety and well-being of our employees as well as on our customers’ supply chains – but the continued implementation of our Strategy 2023 will also remain an integral part of our agenda.”

The company has a fleet of 234 modern container ships and a total transport capacity of 1.7 million TEU.

Moody’s changed the outlook from negative to stable for the container shipping sector amid improving market fundamentals and capacity management discipline among liner majors.

The container shipping sector is expected to sail in a stable operating environment in 2021 amid balanced supply and demand coupled with disciplined capacity management by carriers, low bunker prices and increasing freight rates.