Germany’s Hapag-Lloyd has reported another record quarter on the back of surging freight rates and low bunker prices.
Net profit for the Hamburg-based liner operator rose to €1.2bn ($1.5bn) in the first three months of the year, massively up from just €25m in the same period of last year.
The company expects earnings this year to “clearly surpass prior-year levels”.
Hapag-Lloyd said the positive trend is likely to continue into the second quarter of 2021.
But the company is bracing for a change in heated and congested container markets in the coming months.
Hapag-Lloyd said “a gradual normalisation is currently expected in the second half of the year”.
‘Could do better’
“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 market participants,” chief executive Rolf Habben Jansen said.
Factors contributing to uncertainty include above-average volatility of freight rates, operational challenges, and the inability to predict the pandemic.
“We will do everything in our power to help normalise this difficult market environment as quickly as possible and make as much capacity available as possible," Habben Jansen said.
“We will also double down on our efforts to provide the best possible service quality to our customers — as we know we can and must do better on that front.”
Revenues up by a third
Revenues increased by around 33% to €4bn on the back of higher freight rates.
Ebitda of €1.6bn and Ebit of €1.3bn for the quarter means the company is on course to surpass any prior-year performance.
Analyst Kepler Cheuvreux forecasts a full-year Ebitda of €5.4bn, up from €2.7bn in 2020.
Habben Jansen said Hapag-Lloyd benefited from high demand for container transport at the start of the year, which pushed up rates in the spot market.
Rates were around 38% higher at $1,509 per teu in the quarter, up from $1,094 in the previous year.
Transport volumes were slightly lower at around 3m teu.
Bunker prices were also lower than in 2020 and had a positive impact, with Hapag-Lloyd's first-quarter fuel costs dropping 27% to an average of $384 per tonne.
Hapag-Lloyd operates a fleet of 241 containerships of 1.7m teu.
