Hapag-Lloyd expects solid 2022, lists Covid, Ukraine as uncertainties

German carrier Hapag-Lloyd is expecting earnings to be very strong in the first half of 2022.

EBITDA is expected to be in the range of $12-14 billion (€10.7-12.4 billion) and EBIT to be in the range of $10-12 billion (€8.9-10.7 billion), the carrier said in a statement today.

For comparison - the 2021 numbers were EBITDA of $12.8 billion (approximately €10.9 billion), an increase of over 300 percent, and EBIT of $11.1 billion (approximately €9.4 billion), an increase of over 800 percent.

"The forecast, however, remains subject to considerable uncertainty given the ongoing Covid-19 pandemic and current developments in Ukraine," it added.

Hapag is also anticipating that the strained situation in the global supply chains will ease in the second half of the year, which should lead to a beginning normalisation of earnings.

"The 2022 financial year has gotten off to a successful start for us, but the disruptions in the supply chains have not eased materially yet," says Rolf Habben Jansen, CEO, Hapag-Lloyd AG. "In addition to that, we all face the terrible war in Ukraine. We stand united with the international community, have stopped our bookings to and from Russia, and call for de-escalation and peace."

The safety and well-being of all of our employees continues to be our top priority – and we will also do whatever we can to provide humanitarian support, Jansen added.

Solid 2021 operations, sitting on cash pile
In 2021, Hapag-Lloyd's revenue increased 80 percent to roughly $26.4 billion (approximately €22.3 billion). This can mainly be attributed to a higher average freight rate of $2,003/TEU (2020: $1,115/TEU). The group net result improved to around $10.8 billion (€9.1 billion).

The main drivers of these positive business developments have been significantly improved freight rates resulting from very strong demand for goods exported from Asia, the statement added.

"We look back on an exceptionally successful year in which we invested massively in modern vessels and new containers. In addition, we have significantly strengthened our financial and asset position. However, transport expenses have unfortunately also risen significantly, mainly due to the bottlenecks in the global supply chains," Jansen said.

Transport volumes were roughly on par with the prior-year level at 11.9 million TEU (2020: 11.8 million TEU) due to the strained supply chains.

At the same time, transport expenses rose very significantly, by 17.1 percent, to $12.2 billion (€10.3 billion) due to higher bunker prices and charter rates as well as increased demurrage and storage fees.

"In 2021, the net debt was completely paid off. At the end of the year, the liquidity stood at roughly $8.7 billion (approximately €7.7 billion). It thereby significantly exceeded financial debt with the result that Hapag-Lloyd had net liquidity of around $2.5 billion (€2.2 billion) as of December 31, 2021."

The Executive Board and the Supervisory Board have decided to propose to the Annual General Meeting that a dividend of €35 per share be paid out for the 2021 financial year.