German container shipping firm Hapag-Lloyd is benefitting from a rebound in transport demand but its chief executive warned about the longer-term impact on economic activity from the coronavirus.
"We see a recovery, which started probably some time in the course of third quarter, and we would expect that to continue going into 2021," chief executive Rolf Habben Jansen said in an embargoed briefing session with journalists held on Thursday.
"But there will be a clear long-term effect on the global economy from COVID-19, which will have an impact on the flow of goods," he added.
The world's number five container line will report nine-month earnings on Nov. 13, having doubled its net profit in the first half of 2020 when it maintained its full-year outlook.
Hapag-Lloyd's profitability was boosted by cost reductions, lower shipping fuel prices than a year ago and recovering demand, especially on Transpacific routes, Habben Jansen said.
A number of banks have been raising their target price for Hapag-Lloyd in recent weeks, citing stronger trends in freight pricing.
The company's share price is not far below a seven-week high hit on Wednesday of 53 euros, although sharply down from the all-time high of 187 euros marked in May.
Rival Maersk, the world's number one container line, has also proved resilient in the crisis.
Freight rates on Asia-Europe runs have increased in recent weeks and were stable elsewhere, as were bunker prices for the time being, Habben Jansen said.
However, broker estimates see global transport volumes down by around 11% annually in 2020, meaning operators must adjust capacity to demand to protect incomes, he added.
(Reporting by Vera Eckert, additional reporting by Jonathan Saul, editing by Kirsten Donovan)