The Hamburg-headquartered container line Hapag-Lloyd has reported figures at the upper end of forecasts for full year 2018.
Revenues increased by 15% to EUR 11.5 billion (EUR 10.0 billion), largely due to higher volumes following the merger with UASC. Higher expenses were the result of strong volume growth and a hike in bunker prices from USD 318 per tonne in 2017 to an average of USD 421 last year. The group’s net result increased by EUR 13 million to EUR 46 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) hit EUR 1,138 million, up from EUR 1,055 in the previous year, while earnings before interest and taxes climbed to EUR 443 million compared with EUR 411 million in 2017.
Commenting on the results, the company’s CEO Rolf Habben Jansen, said: “The market environment in 2018 was certainly not easy. In the first half of the year, freight rates were below our expectations and bunker prices and costs increased during the year. In the second half of the year, however, these effects were partially offset as we benefited from higher global transport volumes, better freight rates and improvements on the cost side. All in all, we are satisfied with the financial results for 2018."
Looking ahead and in light of the IMF’s most recent forecasts of a 3.5% increase in global economic growth in 2019 and a 4% hike in trade volumes, the liner company is expecting a further rise in transport volumes this year. This, combined with a lower increase in global transport capacity compared with 2018, should lead to slightly higher freight rates, the company said. However, it was expecting bunker prices to be ‘moderately higher’ this year, it said.
Provided that the company can achieve the expected freight rate, the anticipated improvement in revenue quality combined with the cost savings as part of its Strategy 2023, expected higher volumes should lead to a 2019 EBITDA in the range of EUR 1.6 to EUR 2.0 billion and an EBIT in the range of EUR 0.5 to EUR 0.9 billion, Hapag-Lloyd said.