According to Alphaliner, the German shipping line, Hapag-Lloyd reports a record operating profit of 4.3 billion euros ($4.8 billion) for the first three months of the year after freight rates rose 84% compared to Q1 2021.
However, the line indicated that it expected second-quarter results to come in “slightly down” from the period just ended, indicating results may have peaked, Alphaliner reports.
Now, expecting that an easing of lockdowns in China would boost demand, the company said consumer sentiment was turning. “We have to accept that demand is slightly declining over time,” Hapag-Lloyd chief financial officer Mark Frese said.
Hapag-Lloyd posted revenue of EUR 7.97 billion for the first quarter, almost 10% higher than the last quarter of 2021. EBIT was 19% higher than the previous quarter, Alphaliner reports.
The line pointed to higher average freight rates at $2,774 per teu and a stronger US dollar. Meanwhile, demand remained strong in the US, Hapag Lloyd said.
Increase in container handling and fuel
However, costs rose again, with an increase in container handling during the quarter, in addition to a 60% year-on-year rise in average bunker prices to $613 per tonne (Q1 2021: $384 per tonne).
Hapag-Lloyd reported that its bunker exposure would change over time as it sought to increase its current scrubber installation from around 15% of its ships to between 25% and 30% of its fleet.
The level of future earnings will depend on congestion and demand, and no further potential disruption to supply chains is expected to go haywire with volume declines.
Freight rates would continue to fall, Hapag-Lloyd said, although long-term contracts, which make up 50% of its business, would provide some protection against falling rates.
Following the announcement of the results for the first quarter of 2022, Hapag-Lloyd left the forecasts for the full year unchanged from its update on April 28, 2022.
The company forecasts an EBITDA in the range of 13.6 = 15.5 billion euros and an EBIT of 11.7 – 13.6 billion.
The company has proposed to pay a dividend of USD 35 to investors for 2021 ten times the amount of 2020 and equivalent to a total of USD 6.2 billion.
Source: Alphaliner
