Global liner shipping company Hapag-Lloyd announced a group net income of EUR46 million (almost US$52 million) in 2018, which is EUR13 million higher than the previous year’s income of EUR33 million.
EBITDA rose to EUR1.138 billion against EUR1.055 billion in 2017, while EBIT went up to EUR443 million from EUR411 million in the preceding year.
Both EBITDA and EBIT are at the upper end of the ranges forecast for the 2018 full financial year, said the German container carrier in a statement.
“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,” said Rolf Habben Jansen, chief executive officer of Hapag-Lloyd.
“In the second half of the year, however, these effects were partially offset as we benefitted 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,” he added.
Revenues increased by 15% in 2018 to EUR11.5 billion from the 2017 figure of EUR10.0 billion, in particular due to the merger with UASC and the associated 21% increase in transport volume to 11.9 million twenty-foot equivalent (TEUs).
At $1,044 per TEU, the average freight rate for the year as a whole was below the prior-year level of $1,060 per TEU, with a better fourth quarter at $1,079 per TEU from $1,038 per standard unit in the last quarter of 2017.
“On a pro forma basis and when compared to the combined business of Hapag-Lloyd and UASC for the full year 2017, the transport volume is up 6% and the average freight rate is up 2%,” said the carrier.
Jansen said: “While our business is and will remain cyclical, market conditions have gradually improved for liner shipping companies over the last few years.”
He said the company’s course in the next few years is set, and its objectives for 2019 are clear: “improve earnings, further reduce our debt and continue to implement our Strategy 2023—all aimed at creating more value for our customers and for our shareholders as we strive to become number one for quality.”
Looking ahead, Hapag-Lloyd is anticipating a rise in transport volume in 2019 in line with the general growth of the market.
Additionally, assuming a lower increase in global transport capacity compared to 2018, Hapag-Lloyd’s average freight rate in 2019 is likely to increase slightly compared with the previous year. The company is also expecting the average bunker consumption price in 2019 to be moderately higher compared to the previous year.
Hapag-Lloyd said that if it achieves the expected freight rate, the anticipated improvement in revenue quality combined with the cost savings as part of its Strategy 2023, and the expected growth in volumes, it is forecasting an EBITDA in the range of EUR1.6 billion to EUR2.0 billion and an EBIT in the range of EUR0.5 billion to EUR0.9 billion.
