For the first quarter of 2020, Hapag-Lloyd recorded earnings before interest and taxes (EBIT) of USD 176 million compared to USD 243 million for the same period in 2019, a drop of 27%.
The Group net result declined to approximately USD 27 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased slightly to USD 517 million.
Rolf Habben Jansen, chief xecutive officer, Hapag-Lloyd AG, commented: “Despite the coronavirus pandemic, we have gotten the year off to a good start. Higher transport volumes and better freight rates have boosted our revenues. The financial result is below the first quarter of the previous year as we faced higher bunker prices after the new IMO 2020 rules on 1 January and we had a significant negative bunker stock valuation after the decline in crude oil prices at the end of the first quarter,”
Revenues increased in the first quarter of 2020 by around 6 percent, to USD 3.7 billion. This can primarily be attributed to a 4.3 percent increase in transport volumes, to more than 3 million TEU, and an improved average freight rate of USD 1,094 per TEU. Transport expenses increased by almost 10 percent, disproportionately to revenues, particularly due to higher bunker costs, which increased by USD 98 to USD 523 per tonne as a result of the transition to low-sulphur fuel oil required by the IMO 2020 regulation. This had a negative impact on earnings, as did a devaluation of bunker inventories of around USD 64 million due to the rapid decline in crude oil prices that began at the end of the first quarter.
Rolf Habben Jansen added: “Although we were able to pick up a bit of tailwind at the beginning of the year, we anticipate that the coronavirus pandemic will have very significant impacts in 2020, beginning in the second quarter. Our main focuses will continue to be the safety and well-being of our employees as well as the supply chains of our customers. We have taken a wide range of measures designed to save an amount in the mid-triple-digit million range to safeguard our profitability and liquidity. We adjust our service network to the lower demand and seek savings in all cost categories, from terminal, transport, equipment and network costs to overhead.”