Hapag-Lloyd sees a 95% increase in net profit in the first six months of 2020

Hapag-Lloyd sees a 95% increase in net profit in the first six months of 2020
Written by:
Wajeeh Khan
14th August, 11:32
  • Hapag-Lloyd sees a 95% increase in net profit in the first six months of 2020.
  • The container carrier says volumes are unlikely to recover to pre-virus levels in 2020.
  • Hapag forecasts its full-year EBITDA to fall in the range of £1.53 billion to £1.98 billion.

Hapag-Lloyd (ETR: HLAG) said on Friday that in the first half (H1) of the current fiscal year, its net profit posted an almost 100% increase. The company reaffirmed its guidance for the full year but acknowledged the rising Coronavirus uncertainty that it said can result in disruptions in the future.

According to CEO Rolf Habben of Hapag:

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“We have not put the pandemic behind us. Compared to a normal situation, customers’ booking behaviour is volatile.”

In the container carrier industry, Hapag currently holds the fifth spot in terms of vessel capacity. The German company highlighted a 3.5% decline on an annualised basis in transport volumes to 5.8 million TEU (twenty-foot equivalent units) on Friday. Hapag also said on Friday that Beirut container terminal had resumed operations.

Hapag says volumes are unlikely to recover to pre-virus levels in 2020

Habben expressed confidence that early signs of recovery in volumes were evident in recent weeks. He, however, warned that recovery to pre-virus levels is unlikely this year as the Coronavirus pandemic continues to weigh on economic activity across the globe.

At £256.78 million, the international shipping company printed a massive 95% increase in net profit in the first six months of 2020. In the comparable period of 2019, its net profit was capped at £131.54 million.

As per the CEO, the increase in net profit was attributed to lower fuel costs and capacity discipline in the second quarter. The Coronavirus pandemic weighed heavily on the energy market and pushed oil prices to historically low levels in recent months. Hapag resorted to cost-cutting and adjusting capacity in line with lower demand to safeguard its performance in the past three months.  

Hapag’s annual forecast for earnings before interest and taxes

For the full year, the container transportation company forecasts its EBITDA to fall in the range of £1.53 billion to £1.98 billion and its EBIT in the range of £450 million to £900 million.

In the first half, Hapag’s EBIT came in at £460.40 million versus £350.48 million in the same period last year. Its H1 EBITDA was £1.05 billion versus the year-ago figure of £861.34 million.

Shares of the company jumped over 5% in premarket trading on Friday. The stock gained another 5% on market open. Hapag-Lloyd has remained fairly volatile in the stock market this year. It started the year 2020 at £68.29 per share and rallied to £168 per share in mid-May. At the time of writing, it has plummeted back to £50 per share level.

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