Hapag-Lloyd shares were gaining ground today after the German container line handed out a dividend alongside a strong outlook for 2019 — in contrast to the cautious stance of rival Maersk Line.
Hapag-Lloyd expects freight rates to increase slightly in 2019 supported by demand growth of 4%, while capacity expansion is expected to slow.
Coupled with cost cuts outlined in Hapag's Strategy 2023, its annual report projects an operating profit of between €500m and €900m (1.02bn) in 2019.
Nicolay Dyvik of DNB Markets noted Hapag’s demand growth expectations were ahead of the 1% to 3% projected by Maersk Line amid a cautious global stance outlined in February.
Berenberg analyst Joel Spungin described Hapag’s outlook as encouraging.
“Despite various risks to the global economy, Hapag is more optimistic about the industry growth outlook than Maersk,” he said.
“Year to date, ordering has been less than 100,000 teu of new capacity. Hapag expects net capacity growth of 2.5%, well below throughput growth.”
Hapag had previously announced a profit of €46m for 2018 in a market chief executive Rolf Habben Jansen described as “certainly not easy”.
“While our business is and will remain cyclical, market conditions have gradually improved for liner shipping companies over the last few years,” he said.
“Our course for the next few years is set and our objectives for 2019 are clear: Improve earnings, further reduce our debt and continue to implement our Strategy 2023.”
