Photo: Illustration. Image Courtesy: Hapag-Lloyd

Hapag-Lloyd buys container liner business of Africa specialist DAL

German container shipping company Hapag-Lloyd has decided to acquire the container liner business of compatriot carrier Deutsche Afrika-Linien (DAL).

The duo signed a framework agreement on 10 March 2022.

With a history dating back to the year 1890, DAL is an established liner shipping company for the transportation of containerised cargo and operates with four liner services between Europe, South Africa and the Indian Ocean.

Headquartered in Hamburg, the Africa expert is represented with own offices in Germany and South Africa as well as through third-party agents in 47 countries worldwide.

DAL owns a 6,589 TEU container ship and operates a container fleet of around 17,800 boxes (owned and leased), which will be taken over as part of the acquisition.

“Africa remains an important strategic growth market. Particularly for our service offering from and to South Africa, DAL is a valuable addition allowing us to offer our customers a better network and additional port coverage in this region,” Rolf Habben Jansen, CEO of Hapag-Lloyd, commented.

Last year, Hapag-Lloyd acquired Africa-specialised carrier NileDutch, which significantly strengthened the carrier’s presence and service offering to and from West Africa.

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This growth-oriented strategy was also underlined by new office openings in Kenya, Morocco and Senegal in 2021 and the establishment of a quality service center (QSC) in Mauritius in 2020.

The completion of the transaction is subject to the approval of the responsible antitrust authorities, according to Hapag-Lloyd.

Hapag-Lloyd expects a strong 2022

Following a successful financial performance in 2021 which was driven by high freight rates, Hapag-Lloyd expects earnings to be very strong in the first half of 2022.

The company anticipates that the strained situation in the global supply chains will ease in the second half of the year, which should lead to a beginning normalisation of earnings.

As informed, EBITDA is expected to be in the range of $12 to 14 billion and EBIT to be in the range of $10 to 12 billion.

However, this forecast remains subject to considerable uncertainty given the ongoing COVID-19 pandemic and current developments in Ukraine, Hapag-Lloyd noted.

“The 2022 financial year has gotten off to a successful start for us, but the disruptions in the supply chains have not eased materially yet. In addition to that, we all face the terrible war in Ukraine. We stand united with the international community, have stopped our bookings to and from Russia, and call for de-escalation and peace,” Habben Jansen said.

“The safety and well-being of all of our employees continues to be our top priority – and we will also do whatever we can to provide humanitarian support.”

In 2021, Hapag-Lloyd’s EBITDA increased to slightly more than $12.8 billion. The EBIT rose to $11.1 billion, and the group net result improved to around $10.8 billion.

The main drivers of these positive business developments have been significantly improved freight rates resulting from very strong demand for goods exported from Asia.

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On the sustainability agenda, the company plans to deploy the first of its twelve dual-fuel 23,500+ vessels in 2023. In 2020 and 2021, the German carrier ordered the ultra large container vessels (ULCVs) from South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME).

With this order, Hapag-Lloyd joined its counterparts in ordering dual-fuel, environmentally friendly ULCVs.

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The newbuilds will help the company further cut its CO2 emissions in times when regulatory authorities are charting the way forward with ever stricter regulations.

With a fleet of 253 containerships and a total transport capacity of 1.8 million TEU, Hapag-Lloyd is currently the world’s fifth-largest container shipping company, according to data provided by Alphaliner.

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