Hapag-Lloyd has raised its full-year forecast based on preliminary third-quarter figures showing a year-over-year earnings jump of €96 million ($112 million).
Hapag-Lloyd, the world’s fifth-largest container carrier, said in an announcement Thursday that “due to the positive development in Q3,” it was raising its 2020 earnings before interest and taxes (EBIT) forecast to between €1.1 billion and €1.3 billion ($1.28 billion to $1.52 billion) and earnings before interest, taxes, depreciation and amortization (EBITDA) to between €2.4 billion and €2.6 billion ($2.8 billion to $3.04 billion).
The German container shipping line is scheduled to publish its detailed Q3 figures on Nov. 13 but said Thursday that preliminary numbers showed EBIT of €350 million ($409 million), up “significantly” from €253 million ($295.9 million) in the third quarter of 2019. EBITDA jumped from €554 million ($648 million) last year to an estimated €650 million ($760 million) in Q3 of 2020.
When reporting sizable profitability gains for the first half of the year in August, Hapag-Lloyd stood by its full-year forecast of EBIT of €496.7 million to €940.6 million ($581 million to $1.1 billion) and EBITDA of €1.7 billion to €2.2 billion ($2 billion to $2.6 billion).
Hapag-Lloyd attributed the “positive business developments” to higher demand and volumes in Q3 following the worldwide shutdown caused by the COVID-19 pandemic as well as cost and revenue management measures put in place in Q1 through the company’s Performance Safeguarding Program.
“We have experienced a strong third quarter with a high demand, especially for exports out of Asia. Thanks to the positive market development and the wide range of measures we have introduced in recent months, we expect a financial year with results well above our previous forecast,” CEO Rolf Habben Jansen said in Thursday’s announcement.
As Jansen was during a press briefing last week, when he said he doesn’t “get carried away” looking at the positive numbers, Hapag-Lloyd’s leader remains cautious.
“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,” he said in Thursday’s statement.
Others are more optimistic. On Wednesday, Moody’s Investors Service raised Hapag-Lloyd’s credit rating a notch, from B1 with a negative outlook to Ba3 with a stable outlook. Hapag-Lloyd said this is the highest credit rating it has received since the first issued by Moody’s in 2010.
Last week Standard & Poor’s (S&P) raised its credit rating on Hapag-Lloyd from B+ to BB- with a positive outlook.
“We are extremely pleased that Moody’s as well as S&P have recognized our long-term efforts to improve our balance sheet structure through continuous operational improvements and repayment of debt,” Hapag-Lloyd Chief Financial Officer Mark Frese said in a statement Wednesday. “Going forward, we are committed to even further improve our credit quality. By consequently implementing our Strategy 2023, we will be able to reach this goal.”