In what must count as liner shipping’s most significant understatement Hapag-Lloyd CEO Rolf Habben Jansen said today that this year “will be a very unusual year”.
Jansen explained that following the initial shocks in Asia those economies have started to recover more quickly than most commentators had anticipated, but now other continents are feeling the impact of the Covid-19 virus outbreak.
“We will in the upcoming weeks and months mainly focus on the three things that matter most to us: the safety and health of our people, keeping the Supply Chains of our customers flowing and taking precautionary financial measures to weather the storm if it lasts longer than anticipated.” said Jansen.
The liner shipping company is persisting with its Strategy 2023 policy in the face of the looming virus induced economic recession, that many economists are now saying is looking much more likely, with both the US and UK slashing interest rates in an effort to kick-start economic activity.
Acknowledging the effect of the Coronavirus Hapag-Lloyd expects a reduction in its 2020 returns compared to, what it says, was a bumper year in 2019.
Last year saw the group’s net result improve significantly to around US$418 million (€373 million); with earnings before interest, taxes, depreciation and amortisation increasing to US$2.2 billion (€2.05 billion). At the same time, earnings before interest and taxes (EBIT) climbed to US$908 million (€811 million).
“Today we are in rapidly changing and uncertain times,” said Jansen, who estimates that Hapag-Lloyd expects an EBITDA of US$1.82-2.36 billion (€1.7-€2.2 billion) and an EBIT of US$536.68 million to US$1.07 billion (€500 million to €1 billion) in 2020.
Forecasts for 2020 are, “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, added Jansen.