Photo credits @ Flickr/Seth Anderson

Hapag-Lloyd to build container terminal in Egypt as Q1 net profit triples

Hapag-Lloyd is building a new container terminal it shall operate in the Egyptian port of Damietta, the company has announced. Hapag-Lloyd has also released its 2022 Q1 results, which show the group's net profit was over three times higher than the same period in 2021.

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The new Terminal 2 at the port of Damietta is expected to start operations by 2024. It will have a final total operational capacity of 3.3 mio TEU and serve as Hapag-Lloyd´s dedicated strategic transshipment hub in the East Mediterranean.

“With the new terminal Hapag-Lloyd will significantly improve its transshipment operation in the East Mediterranean market as well as access to the local Egyptian trade”, said Rolf Habben Jansen, CEO of Hapag-Lloyd.

A joint venture of three core shareholders – Hapag-Lloyd Damietta GmbH (39%), Eurogate Damietta GmbH (29.5%) and Contship Damietta Srl (29.5%) – was founded to develop and operate “Terminal 2” in the port.

Strong Q1

The company has also just released its financial report for Q1 2022 which documents a strong start to the year. Hapag-Lloyd concluded the first quarter of 2022 with an EBITDA of USD 5.3 billion (EUR 4.7 billion). The EBIT rose to USD 4.8 billion (EUR 4.3 billion), and the group profit climbed to USD 4.7 billion (EUR 4.2 billion).

“The year has got off to an exceptionally strong start on the whole, and whilst there have been first signs that the market has passed its peak we also expect a strong second quarter,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.

Revenues rose in the first quarter of 2022 to USD 9.0 billion (EUR 8.0 billion). This can primarily be attributed to a much higher average freight rate of 2,774 USD/TEU (Q1 2021: 1,509 USD/TEU) and a stronger US dollar.

Many ports are still congested, and hinterland infrastructures are strained, which together is resulting in longer turnaround times for ships and containers. Overall, transport volumes were roughly on a par with the prior-year level, at 3.0 million TEU. The result was impacted by significantly increasing expenses for container handling and a roughly 60 per cent higher average bunker consumption price, which stood at USD 613 per tonne (Q1 2021: 384 USD per tonne) in the first quarter.

Based on the current business performance, the second quarter will exceed earlier expectations. In view of these circumstances, the Executive Board of Hapag-Lloyd AG raised its earnings forecast for the current financial year on 28 April. For the 2022 financial year, an EBITDA in the range of USD 14.5 to 16.5 billion (EUR 13.6 to 15.5 billion) and an EBIT in the range of USD 12.5 to 14.5 billion (EUR 11.7 to 13.6 billion) are now expected. However, this forecast remains subject to considerable uncertainty given the ongoing COVID-19 pandemic and the war in Ukraine.

Global supply chains continue to be under significant pressure – not least because of the recent measures taken in China in response to COVID-19 outbreaks. This situation is expected to improve in the second half of the year. For our customers worldwide, we will do everything in our power to help normalise this difficult market environment as quickly as possible. At the same time, we will continue to focus on quality and sustainability and further implement our Strategy 2023,” Habben Jansen added.

Photo credits @ Flickr/ Seth AndersonCC BY-NC-SA 2.0