Hapag-Lloyd bullish on 2021, following “healthy” 2020 results

2020 was an “exceptional year” for the shipping line, but 2021 results might turn out to be even more promising, CFO Mark Frese expects. For the first quarter, the management forecasts an
EBIT of at least 1,25 billion euros, compared to 160 million euros in the previous-year period. This high-flying initial period, however, will be followed by a gradual normalization of the ocean
freight business in the months after, the management predicts. Its optimistic outlook followed the presentation of the company’s 2020 annual results.

Due to the strong 2020 results and a positive 2021 outlook H-L shareholders can expect dividents of €3.50 per share, proposed CFO Mark Frese
Due to the strong 2020 results and a positive 2021 outlook H-L shareholders can expect dividents of €3.50 per share, proposed CFO Mark Frese

CEO Rolf Habben Jansen opened the event in a very business-oriented manner, showing no trace of emotion or triumph. He would, however, have had good reasons for sentiment, given the outstanding
results the Hamburg-headquartered shipping line achieved last year. Earnings before interest and taxes (EBIT) rose to roughly 1.3 billion euros (USD 1.5 billion). The Group net result improved to
around EUR 935 million (USD 1.1 billion). As main drivers, Mr. Habben Jansen identified a stiff cost-cutting program resulting in savings of more than 450 million euros (USD 500 million),
complemented by slightly improved freight rates and lower bunker prices. Quarter 4, in particular, proved to be very profitable, CFO Mark Frese pointed out.
As for revenues: they went up nearly 3%, totaling approximately 12,8 billion euros (USD 14.6 bn).

Port congestions remain a major problem
Key driver of the 2020 earnings was a freight rate increase of roughly 4% to 1,115 USD/TEU versus 1,072 USD/TEU in 2019. However, transport volumes trailed 2019 figures (-1.6%), but clearly
surpassed the level anticipated by analysts during the pandemic.
Turning to the 2020 weak points, the manager regretted a decrease in the efficiencies of sailing times caused by grave port congestions. This deteriorated his company’s service quality,
“although we tried to avoid calling at congested harbors wherever possible in order to be punctual,” he said. Meanwhile, this problem has got even worse on a global level as sea freight
continues to run strong.


“We were underrepresented in the segment of large vessels,“ H-L CEO Rolf Habben Jansen
“We were underrepresented in the segment of large vessels,“ H-L CEO Rolf Habben Jansen

Fleet enlargement betters CO2 footprint
Looking to the future, Mr. Habben Jansen outlined his company’s decision to order 6 mega vessels to be built by the Korean Shipyard Daewoo, offering a capacity of 23,000 TEU each. “So far, we
are underrepresented in this large segment,”
he reasoned. The first of the 6 will join Hapag-Lloyd’s fleet in 2023.
On a global level, a number of new vessels have been ordered and “capacity and demand tend to remain at healthy levels in the months ahead,” Mr. Habben Jansen stated.
A top priority standing on Hapag-Lloyd’s business plan is the implementation of a new sustainability strategy to further reduce the company’s global CO2 footprint. Part of the environmental
trajectory is exemplified by the 6 mega vessels ordered in Korea, which will all be powered by LNG. This significantly cleaner fleet of container ships emits very little sulfur, and the NOx
emissions per unit of fuel will be significantly lower. LNG-powered vessels can reduce NOx by over 80%, SOx by over 90%, and PM even by more than 95%.

Cementing position in Africa
Another priority topic is the integration of Africa specialist NileDutch, thus strengthening Hapag-Lloyd’s position on the African continent. NileDutch is a major provider of container services
to/from Africa. Lars Jensen from SeaIntelligence Consulting stated, on LinkedIn, that the acquisition would augment Hapag-Lloyd’s leading portfolio in a fast-growing market. In terms of fleet
size, NileDutch has a fleet only 2% of the size of Hapag-Lloyd’s. However, what is important here, is the strengthened foothold the deal gives Hapag-Lloyd in Africa, the Copenhagen-based maritime
expert concluded.

Heiner Siegmund

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Source: Cargoforwarder

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