Hapag-Lloyd issued its preliminary 2020 results on Wednesday and said earnings were “significantly higher despite the coronavirus pandemic.” In fact, earnings before interest, taxes, depreciation and amortization (EBITDA) were some $900 million higher than in 2019.
The German shipping line reported 2020 EBITDA of $3.1 billion, up from $2.22 billion the year before.
According to the preliminary figures, earnings before interest and taxes (EBIT) increased to about $1.5 billion, up from $908 million in 2019.
“The main drivers of these positive business developments have been improved freight rates and lower bunker prices as well as cost savings of roughly $500 million resulting from the successful implementation of the Performance Safeguarding Program,” Hapag-Lloyd said in Wednesday’s release.
That cost savings figure was right on target. Hapag-Lloyd launched the program in Q1 of 2020 to achieve “savings in the range of a mid-three-digit million USD figure.”
Full-year 2020 revenues increased by about 3% year-over-year to $14.6 billion, up from $14.1 billion in 2019.
Hapag-Lloyd attributed the gain to an increased average freight rate of $1,115 per twenty-foot equivalent unit (TEU), up from $1,072 per TEU in 2019.
Total transport volumes in 2020 were down, Hapag-Lloyd said, but a 1.6% dip seems minor considering the nearly worldwide shutdown caused by the COVID-19 pandemic. Hapag-Lloyd said it transported 11.8 million TEUs in 2020, down from 12 million the year before.
The EBITDA and EBIT results were not surprises. Based on healthy third-quarter results, Hapag-Lloyd had raised its full-year 2020 forecast in October. It said then that it expected EBITDA to come in at $2.8 billion to $3.04 billion and EBIT of $1.28 billion to $1.52 billion. The 2020 results of $3.1 billion in EBITDA and $1.5 billion in EBIT were right on the money.
CEO Rolf Habben Jansen had remained cautious when raising the forecast in October, saying, “The pandemic will remain a huge challenge and a major source of uncertainty for the entire logistics industry. Our focus within the next months will stay on the safety and health of our employees but also on safeguarding the supply chains of our customers.”
Hapag-Lloyd said Wednesday the $1.5 billion in EBIT included “one-off expenses in Q4 2020 of around $140 million, mainly related to fleet optimization.”
In December, Hapag-Lloyd confirmed it had placed a $1 billion order for six ultra large container ships, each with a capacity of more than 23,500 TEUs.
The ships, which will be built by Korean shipyard Daewoo Shipbuilding & Marine Engineering, will be delivered between April and December 2023. All six vessels will be deployed on Europe-Asia routes as part of THE Alliance, the space-sharing pact Hapag-Lloyd has with Yang Ming, HMM and ONE.
Hapag-Lloyd said that as part of its sustainability strategy, “the vessels will be fitted with a state-of-the-art high-pressure dual-fuel engine, which will be extremely fuel efficient. The engine will operate on LNG but has alternatively sufficient tank capacity to operate on conventional fuel.”
Jansen said in December the newbuilds order also was “a significant step forward in modernizing” the fleet and reducing Hapag-Lloyd’s environmental impact.
Hapag-Lloyd will publish its 2020 annual report with the audited financial figures and an outlook for 2021 on March 18.