Hapag-Lloyd expects a "very strong" earnings growth in the first quarter of the year citing exceptionally strong demand for container transports.

Based on preliminary business figures for the month of January and the current business situation, the Executive Board of Hapag-Lloyd AG said it expects the performance indicators EBITDA and EBIT for the first quarter of 2021 to be significantly higher than in the prior-year period.

EBITDA is currently expected to be at least US$1.8 billion compared to the US$517 million seen in the first quarter of 2020.

"Hapag-Lloyd has got the year off to a very good start thanks to exceptionally strong demand for container transports, which has led to a much higher level of freight rates," the German shipping company said.

Better 2021 prospects 

At the same time, Hapag-Lloyd AG also expects that the EBITDA and EBIT for the 2021 business year as a whole will "clearly surpass the prior-year level."

Despite that, it noted that the forecast for the year is subject to considerable uncertainty due to a number of factors, including the above-average volatility of freight rates at this time; operational challenges caused by existing infrastructural bottlenecks, among other things; and the inability to predict the further course or economic impacts of the coronavirus pandemic. 

“We will see a very strong result in the first quarter, but we anticipate a normalisation as the year progresses. We are still seeing slower container turn times, significant congestion in ports around the globe, capacity constraints in rail and truck, and the risks of the coronavirus pandemic remain," said Rolf Habben Jansen, CEO of Hapag-Lloyd. 

“Nevertheless, we do also expect that the result for 2021 as a whole will be significantly higher than the prior-year level. At the same time, we will continue to keep our focus on our employees, serving our customers in the best possible way and the implementation of our Strategy 2023,” he added.

The shipper said additional details on the 2021 forecast will be published with the release of the 2020 Annual Report on 18 March 2021. The final business figures for the first quarter of 2021 will also be published as planned on 12 May 2021.