FRANKFURT, Nov 13 (Reuters) - German container liner Hapag-Lloyd AG is confident of achieving higher earnings in 2020 as lower fuel prices cut shipping costs, demand in Asia recovers and fleet capacity is tight, chief executive Rolf Habben Jansen said on Friday.
“Oil prices have fallen sharply in the coronavirus crisis, that has given us tailwind, especially in the weak second quarter,” said the head of the world’s fifth biggest shipping firm in an interview with Reuters.
“Volumes have bounced back unexpectedly strongly in the third quarter and that will remain the case in the coming months,” he added.
A drop in bunker - shipping fuel - prices by 5.4% to $402 per tonne helped cut operating costs in the first nine-months of 2020, when Hapag-Lloyd posted a 81.1% surge in net profit.
Net profit was 538 million euros ($635 million) in the period, compared with 297 million a year earlier.
The company stuck to guidance for full-year earnings before interest, tax, depreciation and amortisation (EBITDA), which it raised to 2.4-2.6 billion euros last month, and earnings before interest and tax (EBIT) of 1.1-1.3 billion.
Nine-month EBITDA increased 20.4% to 1.8 billion euros and EBIT was up 33.4% at 858 million euros.
Higher freights rates helped profitability, rising 2% to $1,097 per twenty foot equivalent unit (TEU) in the nine months.
This trend partly results from tight supply.
The world’s idle fleet numerically represents 1.8% of total tonnage but in practice is “virtually zero,” Habben Jansen said.
Despite favourable profit numbers and strict cost management, he warned of demand falls further ahead as fallout from the pandemic will leave a lasting imprint on the global economy. “There is bound to be some sort of a weaker period in 2021 but we don’t know how big the dent will be,” he said.
This article originally appeared on Reuters