Coronavirus Crisis: Hapag-Lloyd Prepares for a Difficult Year Ahead
- Business & Finance
Due to the coronavirus pandemic, German shipping major Hapag-Lloyd expects a difficult year ahead that would result in necessary fleet adjustments and lower earnings.
For 2020, Hapag-Lloyd expects an EBITDA of EUR 1.7 billion (USD 1.8) to 2.2 billion and an EBIT of EUR 0.5 to 1 billion.
According to the carrier, the forecast for 2020 is subject to considerably higher uncertainties than normal, particularly due to the coronavirus outbreak. After a decent start of 2020, global container volumes will be impacted by the global coronavirus crisis, and the magnitude of that cannot be determined right now.
“Hapag-Lloyd anticipates that transport capacity deployments may have to be adjusted in light of the coronavirus in the coming months to cope with lower demand,” the liner shipping company said in its audited business results for 2019.
“The extent of the coronavirus outbreak cannot be accurately predicted, but Hapag-Lloyd expects that it will have an impact on the development of earnings at least in the first half of 2020.”
“2020 will be a very unusual year after we have seen that due to the coronavirus outbreak conditions in many markets have changed very quickly over the last weeks. After the initial shock, markets in China and other Asian Countries have started to recover probably faster than many feared – but now also the other continents are impacted, and the effects of that will be significant,” Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd AG, commented.
“We will in the upcoming weeks and months mainly focus on the three things that matter most to us: the safety and health of our people, keeping the supply chains of our customers flowing and taking precautionary financial measures to weather the storm if it lasts longer than anticipated,” he added.
As World Maritime News earlier reported, 2019 was a very good year for Hapag-Lloyd as it benefitted from higher volumes and better freight rates. The company recorded an increase of more than 80 percent in earnings before interest and taxes (EBIT), which stood at EUR 811 million against EUR 444 million posted in 2018. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose to EUR 1,986 million from EUR 1,139 million posted a year earlier.
Hapag-Lloyd currently has a fleet of 239 containerships and a total transport capacity of 1.7 million TEU.