Hapag-Lloyd hit the top end of its profit forecast for 2021, reporting an operating profit (EBIT) of EUR 9.39 bn (USD 11.11 bn) for the year versus EUR 1.31 bn a year earlier.
The company said it expected earnings momentum to remain strong in H1 followed by a gradual easing during the course of H2. However it warned operational costs were rising due to higher charter rates, longer storage durations, and inland transport issues. Transport expenses rose 16% to USD 1,175 per teu, up from USD 1,015 in 2020.
Handling and haulage added an extra USD 82 per teu to the total during the year, showing the negative impact of operational disruption, while bunker expenses added USD 32 per teu. The line’s bunker costs, which topped post-IMO 2020 levels in Q4 2021, would likely continue to rise. Depreciation and amortisation also rose due to the effect of a bigger percentage of chartered-in tonnage at higher rates.
The Dutch carrier predicts 2022 EBIT to come in at EUR 8.9 - 10.7 bn, indicating a potentially higher trend this year, though it acknowledged considerable uncertainty over both COVID and Ukraine. Freight rates could continue to go up before normalising, said CEO Rolf Habben Jansen.
The company confirmed it had experienced good take-up on its multiyear contracts introduced in 2021, where rates were typically fixed for 3 years either at a fixed or variable rate in return for committed volumes. It aims to secure 10% of volumes under multi-year contracts during 2022.
Overall, revenue rose from EUR 12.77 bn in 2020 to EUR 22.27 bn in 2021 with volumes largely flat. Transpacific volumes fell slightly while the Far East was stable. The line logged ’healthy’ growth in Latin
America and Middle East where port congestion was less present.
Hapag-Lloyd said a strategy review had re-confirmed its three main goals from 2018: profitability through the cycle, to remain a global player with a market share excluding integration of around 10%, and to be number one in quality. However, it had now added sustainability to these goals.
Habben Jansen indicated the company would refine its priorities for the next two years around three pillars: the first would be aimed at simplifying the network and fleet, deploying bigger ships to keep costs down. It would also potentially consolidate transshipments in fewer hubs. A second pillar to enhance quality would focus on greater digitalization, growth in ‘attractive markets’ and enhanced sustainability. This would require a third pillar: investment, in eco friendly assets, selective M&A, and people.
