Hapag-Lloyd has concluded the first quarter of 2021 with earnings before interest, taxes, depreciation, and amortization (EBITDA) of roughly US$1.9 billion, and earnings before interest and taxes (EBIT) rising to roughly US$1.5 billion as the Group also saw net result improved to around US$1.5 billion.
Benefits from better freight rates cited
"On the back of the high demand for container transports, we have benefited from better freight rates, especially in the spot market. 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," said Rolf Habben Jansen, CEO of Hapag-Lloyd.
Hapag-Lloyd also noted that revenues increased in the first quarter of 2021 by around 33% to roughly US$4.9 billion, particularly due to a higher average freight rate, which increased by approximately 38% to reach US$1,509/TEU compared to the US$1,094/TEU seen in Q1 2020.
The shipping line noted, however, that 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 compared to the 3.1 million TEU recorded a year prior, or minus 2.6%.
On the other hand, it noted that roughly 27% lower average bunker consumption price, which amounted to US$384 per tonne in the first three months of the 2021 financial year from the year-ago level of US$523 per tonne, had a positive impact on earnings.
Outlook for the year
"Hapag-Lloyd expects that the EBITDA and EBIT for the current 2021 financial year as a whole will clearly surpass the prior-year level," the statement read.
"While the positive earnings trend is likely to continue in the second quarter of 2021, a gradual normalization is currently expected in the second half of the year," it added, noting, however, that 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.
Challenges in the market remain
"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. We will do everything in our power to help normalize this difficult market environment as quickly as possible and make as much capacity available as possible," Jansen said.
"We will also double down on our efforts to provide the best possible service quality to our customers – as we know that we can and must still do better on that front – and we will continue to implement our Strategy 2023," he added.
