Hapag-Lloyd is expecting the coronavirus outbreak (Covid-19) to impact container volumes and drag earnings by the first half of 2020.
In its published business results for 2019, the German shipping major said the forecast for 2020 is subject to “considerably higher uncertainties than normal,” particularly due to the coronavirus outbreak.
“After a decent start of 2020, global container volumes will be impacted by the global coronavirus crisis, and the magnitude of that is impossible to determine right now,” Hapag-Lloyd said, noting that transport capacity deployments may have to be adjusted in light of the coronavirus in the coming months to cope with lower demand.
“The extent of the coronavirus outbreak cannot be accurately predicted, but Hapag-Lloyd expects that it will have an impact on the development of earnings at least in the first half of 2020,” it added, saying that the firm expects an EBITDA of EUR 1.7 to 2.2 billion and an EBIT of EUR 0.5 to 1.0 billion.
Very unusual year
“2020 will be a very unusual year after we have seen that due to the coronavirus outbreak conditions in many markets have changed very quickly over the last weeks. After the initial shock, markets in China and other Asian countries have started to recover probably faster than many feared – but now also the other continents are impacted, and the effects of that will be significant,” said Rolf Habben Jansen, chief executive officer of Hapag-Lloyd AG.
The Hapag-Lloyd CEO noted that in the coming weeks and months, the shipping giant's main focus will be the safety and health of its people, keeping the Supply Chains of our customers flowing and taking precautionary financial measures to weather the storm if it lasts longer than anticipated.
“Today we are in rapidly changing and uncertain times, but that does not take away that 2019 was a very good year for Hapag-Lloyd. We benefitted from higher volumes and better freight rates kept a close eye on our costs and brought down our financial debt significantly. We also continued implementing our Strategy 2023, and achieved a Group net result that is well above the prior-year result,” Jansen said referring to the Group's 2019 performance.