Hapag-Lloyd increases earnings forecast for 2020 amid high rates, demand

Houston — Citing a favorable market in the third quarter, the German container carrier Hapag-Lloyd expects an EBITDA of Eur2.4 billion-Eur2.6 billion for 2020, up from its March forecast of Eur1.7 billion-Eur2.2 billion, the company said Oct. 15.

"We have experienced a strong third quarter with a high demand, especially for exports out of Asia", said CEO Rolf Habben Jansen said in a statement. "Thanks to the positive market development and the wide range of measures we have introduced in recent months, we expect a financial year with results well above our previous forecast."

This comes even as Hapag-Lloyd's freight volume was down 3% year over year, the company said.

"The main drivers of the positive business developments have been significantly higher demand and respectively higher transport volumes, and rigorous cost and revenue management," Hapag-Lloyd said.

Record-high freight rates on the eastbound trans-Pacific lane also played a part in the company's better than expected financial results.

At $3,750/FEU, the cost to ship from North Asia to West Coast North America is now near triple what it was at the start of 2020, when S&P Global Platts assessed it at $1,350/FEU. For goods flowing from North Asia to East Coast North America, rates have also jumped, climbing 82% year to date to $4,550/FEU on Oct. 15.

The company's full financial report on Q3 will be published on Nov. 13.