Hapag-Lloyd has carded a stronger than forecast second quarter report and is keeping its full-year forecast stable despite geopolitical uncertainty and a softening Eurozone economy.
The German container line saw freight rates surpass market expectations with a standout showing in Latin America, according to analysts at Clarksons Platou Securities.
Rolf Habben Jansen, chief executive of Hapag-Lloyd, said: “After a solid first half of 2019, our outlook remains unchanged, even if we have to deal with more trade restrictions and see increasing geopolitical risk, which of course could impact growth.”
Hapag booked a profit of €146m ($163.m) for the opening six months of 2019, a major swing from the €101m red number at the same stage in 2018.
Frode Morkedal of Clarksons Platou Securities noted second quarter core operating profit of €467m was well clear of the €388m consensus.
Hapag, citing data from the International Monetary Fund, explained global economic growth is forecast at 3.2% and 3.5% in 2019 and 2020. Global trade is projected to climb by 2.5% in 2019.
“The current forecast includes the increase in US tariffs on Chinese imports from 10% to 25% in May 2019 as well as the retaliatory actions by China,” Hapag said.
“In addition, the uncertainties around Brexit as well as geopolitical tensions weigh on demand worldwide.
“The expected recovery in 2020 is based on the assumptions that the temporary growth weakness in the euro area will gradually turn around, that currently troubled emerging
markets will gradually stabalise and that current trade conflicts will be solved over time.”
Hapag is charting for full-year earnings of between €1.6bn and €2.0bn.
Morkedal noted that with consensus at €1.8bn the report looks neutral to earnings estimates.
Analysts at Berenberg said: "Despite the obvious macro concerns and soft trade growth, capacity discipline seems okay, which is supportive of rates."
