Charter rates, currency movements and an increase in cargo have driven German container line Hapag-Lloyd to a better than expected first quarter performance.
Its strong start to the year is coupled with a positive outlook for the container market, despite questions about world economic growth.
However, analysts caution the strong numbers are being distorted by new accounting laws, which have made first quarter profit projections tricky across the market.
Rolf Habben Jansen, chief executive of Hapag-Lloyd, said in a statement: “Thanks to higher transport volumes, better freight rates and a stronger US dollar, we achieved a good result and got the year off to a very decent start.”
Hapag booked a profit of €96m ($107m) for the first quarter, a swing from an €34m loss at the same stage in 2018.
EBITDA came in at $556m, ahead of the $485m consensus, but the figure included a $113m bump in depreciation relating to IFRS 16, analysts at Berenberg Capital explained.
An operating profit of $243m was well ahead of the $196m, which Joel Spungin of Berenberg said was a cleaner comparison between performance and expectations.
He said the first quarter report looked good, while costs were kept under control and cash flow remained steady.
For the full year, the shipowner is projecting an operating profit of €500m to €900m.
Habben Jansen said Hapag was cautiously optimistic about 2019 despite slightly dampened forecasts for global economic growth and higher fuel prices.
“[The first quarter] was in line with our expectations and we believe we can make further progress towards our strategic objectives throughout the rest of the year as we continue to roll-out and implement our Strategy 2023,” he said.
