Hapag-Lloyd Advises that Coronavirus to Slow Growth through H1
German container shipper Hapag-Lloyd on Friday said the coronavirus outbreak would curb business growth at least until mid-year after reporting a jump in 2019 profit and proposing a higher dividend.
Larger rival Maersk on Friday also warned of a first-quarter hit from the outbreak and suspended its 2020 earnings outlook.
Hapag CEO Rolf Habben Jansen said that impact from the coronavirus was impossible to determine for the time being, but the company was preparing for a blow to trade.
"Transport capacity deployments may have to be adjusted in light of the coronavirus in the coming months to cope with lower demand," he said.
While China and other Asian countries had started to recover probably faster than many feared, other continents were now affected.
Deliveries from China to Germany take up to six weeks, meaning many ports are now beginning to feel the full impact of the virus, which has disrupted container shipping and supply chains worldwide.
The company would aim to sustain its supply chains and take financial precautions if the crisis lasted longer than anticipated, Habben Jansen said.
He is scheduled to address reporters and analysts later on Friday.
The company's net profit for 2019 jumped to 373 million euros ($402 million) from 46 million in 2018, it said in a statement, citing higher freight rate earnings and increased transport volumes.
Habben Jansen said earnings forecasts for 2020 ranged widely due to the coronavirus.
It currently expects earnings before interest, taxes, depreciation and amortisation (EBITDA) of 1.7-2.2 billion euros and earnings before interest and taxes (EBIT) of 0.5-1.0 billion.
Its 2019 EBITDA rose 74% to 1.986 billion euros while EBIT jumped 83% to 811 million euros. Revenue rose 3% to 12.6 billion euros.