German shipping line Hapag-Lloyd reported a bumper first half of the year on Thursday, but echoed its peers in saying that its outlook for container shipping remained highly uncertain.
Hapag-Lloyd concluded the first half of 2022 with an EBITDA of $10.9 billion, while EBIT rose to $9.9 billion. Group profit nearly tripled to $9.5 billion compared to last year.
“We have benefitted from significantly improved freight rates and look back on an extraordinarily strong business performance on the whole in the first half year. At the same time, a steep rise in all cost categories is putting increased pressure on our unit costs,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.
Revenues increased in the first half year of 2022 to $18.6 billion on the back of higher average freight rates, which hit $2,855/TEU compared to an average of $1,612 USD/ TEU in 1H 2021, and a stronger US dollar.
Global supply chains remain under significant pressure due to persistent capacity bottlenecks in ports and congested hinterland infrastructures, leading to longer turnaround times for ships and containers, Hapag-Lloyd said.
Overall, transport volumes in the first half of 2022 were on a par with last year, at approximately 6 million TEU.
Hapag-Lloyd’s result would have been even better if not for significantly higher expenses for container handling and charter ships, as well as by a 67 percent increase in the average bunker price, which rose to $703 per tonne compared to $421 per tonne in H1 2021.
Looking ahead, Hapag-Lloyd has raised its full-year forecast by as much as 30% from previous estimates, as announced July 28. 2022 EBITDA is now expected to be in the range of $19.5 to $21.5 billion, up from $14.5 to $16.5 billion previously, and EBIT in the range of $17.5 to $19.5 billion, up from $12.5 to $14.5 billion.
For comparison, Hapag-Lloyd posted “extraordinarily strong” operating results in 2021, with EBITDA of $12.8 billion, up from $9.6 billion in 2020, and EBIT of $11.1 billion.
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The July 28 guidance noted “significant uncertainty” in the market, namely from the war in Ukraine, continuing disruptions in global supply chains, and the effects of the COVID-19 pandemic. Recent guidance from Maersk and HMM included similar caution, while ONE is holding off on providing guidance altogether.
“We are currently seeing the first signs in some trade lanes that spot rates are easing in the market. Nevertheless, we are expecting a strong second half of the year,” Jansen added. “The currently still strained situation in the global supply chains should improve after this year’s peak season. Our customers can continue to rely on us to do everything in our power to transport their goods to their destination as smoothly as possible. At the same time, we will continue to focus on our quality and sustainability goals as well as on further implementing our Strategy 2023.”
Further out, a wave of newbuilds set for delivery in 2023 is likely to outstrip shipping demand. Global containership capacity growth is expected to be 7% in 2023, compared to demand growth of 3%.
“Over the upcoming 24 months, we clearly see that supply growth will outpace demand growth,” said Jansen in his earnings call with analysts.
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