German liner company Hapag-Lloyd expects very strong earnings growth amid exceptional demand for container transports, which has spurred freight rates.

Based on preliminary business figures for the month of January and the current business situation, the company’s executive board anticipates EBITDA and EBIT for the first quarter of 2021 to be significantly higher than in 2020.

EBITDA is currently expected to be at least $1.8 billion compared to $517 million in Q1 2020, while EBIT is expected to be at least $ 1.5 billion compared to $176 million in Q1 2020.

Hapag-Lloyd said the forecast for the year was subject to considerable uncertainty due to freight rate volatility, operational challenges caused by existing infrastructural bottlenecks, and economic impacts of the coronavirus pandemic.

“We will see a very strong result in the first quarter, but we anticipate a normalisation as the year progresses. We are still seeing slower container turn times, significant congestion in ports around the globe, capacity constraints in rail and truck, and the risks of the coronavirus pandemic remain,” said Rolf Habben Jansen, CEO of Hapag-Lloyd.

“Nevertheless, we do also expect that the result for 2021 as a whole will be significantly higher than the prior-year level.”

The predictions coincide with those made by the industry leader Maersk a week ago.

The company’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew 44 pct. to $8.2bn and revenue grew to $39.7bn in 2020 compared to $38.9bn in 2019.

As for the 2021 outlook, Maersk expects another year of earnings growth and transformation progress.

Maersk’s guidance for the full-year 2021 anticipates an underlying EBITDA in the range of 8.5-10.5bn, compared to $8.3bn in 2020.

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