Hapag-Lloyd reports higher revenues, earnings in 2018

Rising volumes and “reasonable” orders for new ships expected to result in improving balance of supply and demand in the container shipping industry.    Hapag-Lloyd had higher revenue and operating profit in 2018 than the prior year, with the company attributing the improvement to higher container transport volumes, steadily improving freight rates in the second half of the year, its merger with United Arab Shipping Company Ltd. (UASC), and cost synergies resulting from that merger.
   Looking ahead, the company said forecasts of healthy growth in container shipping volume and “reasonable” orders for new ships are expected to lead to an improving balance of supply and demand in the container shipping industry.
   It cited an IHS Global Insight forecast of container volume growth of 4.7 percent in 2019 and 4.9 percent in 2020 and IMF forecast of global economic growth of 3.5 percent in 2019 and 3.6 percent in 2020. It noted the size of the global order book for new ships was 2.5 million TEUs or 11 percent of the global order book in 2018, which it noted was the lowest since 2007 when the order book was for 6.5 million TEUs of new capacity or 61 percent of the global container fleet.
   Hapag-Lloyd said its revenue in 2018 amounted to $13.6 billion compared to $11.3 billion in 2017. Earnings before interest, tax, depreciation and amortization (EBITA) was $1.35 billion in 2018 compared to $1.2 billion in 2017, while earnings before interest and tax (EBIT) was $524 million in 2018 compared to $467 million in 2017.
   In 2018, Hapag-Lloyd moved 11,874,000 TEUs compared with 9,803,000 TEUs in 2017. The average freight rate was $1,044 per TEU in 2018 compared with $1,060 per TEU in 2017.
   For the fourth quarter of 2018, Hapag-Lloyd reported revenue of $3.5 billion compared to $3.1 billion in the fourth quarter of 2017. Earnings before interest, tax, depreciation and amortization (EBITA) in the fourth quarter of 2018 was $372 million compared to $390 million earned in the fourth quarter of 2017, while earnings before interest and tax (EBIT) was $164 million in the fourth quarter of 2018 compared to $167 million in the fourth quarter of 2017.
   The company said the lower EBIT and EBITDA results in the fourth quarter of 2018 reflected the rising cost of fuel.
   In the fourth quarter of 2018, Hapag-Lloyd moved 2,974,000 TEUs compared to 2,774,000 in the fourth quarter of 2017. Average freight rates in the fourth quarter were $1,079 in 2018 and $1,038 in the fourth quarter of 2017.