Home / Shipping/ Hapag-Lloyd sees calmer waters for shipping industry

Hapag-Lloyd sees calmer waters for shipping industry


Comments / {{hitsCtrl.values.hits}} Views / Wednesday, 4 April 2018 00:00

Facebook

 

  • Sees demand growth overtaking supply in 2019
  • Forecasts rise in operating profit in 2018

 HAMBURG (Reuters): Demand for shipping is growing and could outpace the supply of new vessels next year, helping to boost profits at Hapag-Lloyd as it also reaps the benefits of a recent merger, the German company said last week.

The shipping industry has been in the doldrums for years as a slump in trade following the global financial crisis coincided with the delivery of scores of new vessels ordered earlier.

That sparked a wave of deals as firms looked to cut costs, including Hapag-Lloyd’s recent purchase of Gulf peer UASC to become the world’s fifth biggest container shipping company.

However, the Hamburg-based firm’s CEO Rolf Habben Jansen said that order books for new vessels were now relatively small compared with the economic growth that drives seaborne transport demand.

“The idle fleet is also small and demand is growing, that makes us cautiously optimistic,” he told journalists after the company announced a surprise dividend and forecast a rise in annual earnings in 2018.

“We are confident that we can improve profitability further and reduce our debts, while the realisation of synergies (from the UASC deal) is also in focus,” he added. Habben Jansen upheld a January forecast for global container transport demand growth of 4.5% in 2018 and more than 4% in 2019. Demand and supply could be balanced this year, even though the first half will see more ships joining the fleet. But supply may start falling short of demand from next year, he said.

Hapag-Lloyd said 85 to 90% of the $435 million in annual savings targeted over the long term from its tie-up with UASC were due to be realised this year.

Habben Jansen reiterated the savings could eventually exceed the target, but he would only be able to provide details in the second half of 2018. Hapag-Lloyd said it would pay shareholders a dividend of 0.57 euro per share for 2017, after its core profit (EBITDA) nearly doubled to 1.06 billion euros ($1.3 billion). It forecast a rise in EBITDA (earnings before interest, tax, depreciation and amortisation) and operating profit (EBIT).

A concern, however, is rising shipping fuel costs, driven by an increase in crude oil prices. Shipping fuel costs are currently around 27% above the $318 a ton seen in 2017.

 


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Our Cricket Board simply cannot deliver – why not they all quit honourably?

Tuesday, 18 June 2019

“It is necessary, therefore, for the Government to pay serious attention to the doings of Sri Lanka Cricket [board] and take immediate action to lift their game for the progress of our glorious game.” Question for Sri Lanka Cricket (board) Sri La


Yesterday Tamils, today Muslims and tomorrow who?

Tuesday, 18 June 2019

From the time of S.W.R.D. Bandaranaike’s election victory in 1956, one and only one issue had dominated political party campaigns in this country; and that was communalism. The Tamil community was the main focus of these campaigns for over 50 years


Those who go by social proof are easy prey to crafty schemers

Monday, 17 June 2019

Going after social proof Swiss writer and novelist, Rolf Dobelli, in one of the essays in his 2013 book ‘The Art of Thinking Clearly’, has given a fine warning to his readers. He has warned against going by ‘social proof’ or ‘majority view


Poson ponderings on positional power: ‘Authority vested’ vs. ‘authority wasted’

Monday, 17 June 2019

We witnessed a serene Poson Poya, in a far more improved security setting in Sri Lanka. Whilst the Sri Lankan life slowly returning to normal, political fronts do not appear to show the same. Has the political power become the people ‘pava’ (sin)


Columnists More