Hapag-Lloyd has announced its financial results for Q1 2020, reporting revenues of $3.7bn up 5.9% year-on-year. The increase was primarily attributed to a 4.3% increase in transport volumes, to more than 3m TEU, and an improved average freight rate of $1,094 per TEU.
Earnings before interest and taxes (EBIT) decreased 27.6% year-on-year to $176m. Earnings before interest, taxes, depreciation and amortisation (EBITDA) decreased 7.0% year-on-year to $517m, the decline was primarily due to higher bunker costs.
Transport expenses increased by 10%, disproportionately to revenues, particularly due to high bunker costs, which increased by $98 to $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 devaluation of bunker inventories of around $64m due to the rapid decline in crude oil prices that began at the end of the first quarter.
“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,” said Rolf Habben Jansen, Chief Executive Officer of Hapag-Lloyd AG.
Hapag-Lloyd’s earnings forecast for 2020 remains unchanged. It expects full-year EBITDA of $1.8bn to $2.4bn and EBIT of $540m to $1.1bn for the current financial year.
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