Despite a slight decline in transport volumes, German container shipping major Hapag-Lloyd closed the first quarter of 2021 with improved revenue and earnings.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to roughly $1.9 billion in Q1 2021 from $517 million reported in the corresponding period a year earlier.
Earnings before interest and taxes (EBIT) increased to roughly $1.5 billion in the three-month period ended 31 March 2021 from $176 million seen in the first quarter of 2020.
What is more, the group net result improved to around $1.5 billion from $27 million recorded in Q1 last year.
“On the back of the high demand for container transports, we have benefited from better freight rates, especially in the spot market,” Rolf Habben Jansen , CEO of Hapag-Lloyd, commented.
“On top of that, bunker prices have been lower than in 2020. As a result, we concluded the first quarter with a very positive financial result and look back overall on a solid start to the year.”
Revenues increased in the first quarter of 2021 by around 33 percent, to roughly $4.9 billion, particularly due to a higher average freight rate.
Nevertheless, due to the demand-related congestion of port and hinterland infrastructures in many places as well as to a resulting shortage of freely available ships and containers, the transport volume was slightly below the level of the same quarter of the prior year, at roughly 3 million TEU, or minus 2.6 percent. On the other hand, a roughly 27 percent lower average bunker consumption price, which amounted to $384 per tonne in the first three months of the 2021 financial year had a positive impact on earnings.
Outlook 2021
The carrier expects that the EBITDA and EBIT for the current 2021 financial year as a whole will clearly surpass the prior-year level. While the positive earnings trend is likely to continue in the second quarter of 2021, a gradual normalisation is currently expected in the second half of the year.
However, this forecast remains subject to considerable uncertainty due to a number of factors, including the above-average volatility of freight rates at this time; operational challenges, such as infrastructural bottlenecks; and the inability to predict the future course or economic impacts of the COVID-19 pandemic, according to the company.
“While we remain optimistic for 2021 as a whole, the ramifications of the COVID-19 pandemic and the congested supply chains continue to present a huge challenge to all market participants,” Habben Jansen added.
With a fleet of 241 container ships and a total transport capacity of 1.7 million TEU, Hapag-Lloyd is the world’s fifth-largest container shipping company.