Hapag-Lloyd ups H1 profits and keeps guidance, but warns of risks

FILE PHOTO: A Hapag-Lloyd container is pictured at a loading terminal in the port of Hamburg Germany July 26, 2018. Picture taken July 26, 2018. REUTERS/Fabian Bimmer/File Photo

FRANKFURT (Reuters) - German container shipping line Hapag-Lloyd HLAG.DE on Wednesday reported preliminary results for the first half of 2020 showing core profits above those of the same 2019 period and upholding its guidance for full year earnings.

However, the company said in an ad hoc announcement that the forecast was subject to “high uncertainty” due to risks related to the coronavirus crisis and its impact on the macroeconomy and global shipping.

Hapag Lloyd achieved a 20.3% year-on-year rise in earnings before interest, tax, depreciation and amortisation (EBITDA) to 1.15 billion euros (£1.04 billion) and a 28.5% increase in earnings before interest and tax (EBIT) to around 500 million euros in the six months, it said.

Full-year EBITDA should be 1.7 to 2.2 billion euros and EBIT 0.5-1.0 billion euros, it reiterated.

Analysts see a chance that container shipping companies, helped by cost discipline and the resumption of Chinese business activities, can prevent a steep decline in freight rates and benefit from a tentative recovery later in 2020.

Hapag-Lloyd has added several hundred million euros to its 1.1-1.2 billion euro reserve, allowing its operations to continue unhindered for 12 to 18 months should demand problems outside China linger, chief executive Rolf Habben Jansen said in May.

Final first half figures will be published on Aug. 14.

Reporting by Vera Eckert; Editing by Michelle Martin