German container liner Hapag-Lloyd is confident of achieving higher earnings in 2020 as lower fuel prices cut shipping costs, demand in Asia recovers and fleet capacity is tight, its chief executive Rolf Habben Jansen said today. 

"Oil prices have fallen sharply in the coronavirus crisis, that has given us tailwind, especially in the weak second quarter," said the head of the world's fifth biggest shipping firm in an interview with Reuters. 

"Volumes have bounced back unexpectedly strongly in the third quarter and that will remain the case in the coming months," he added. 

A drop in bunker - shipping fuel - prices by 5.4% to $402 per tonne helped cut operating costs in the first nine-months of 2020, when Hapag-Lloyd posted a 81.1% surge in net profit. 

Its net profit came to €538m in the nine month period, compared with €297m a year earlier. 

The company stuck to guidance for full-year earnings before interest, tax, depreciation and amortisation (EBITDA), which it raised to €2.4-2.6 billion last month, and earnings before interest and tax (EBIT) of €1.1-1.3 billion. 

Nine-month EBITDA increased 20.4% to €1.8 billion and EBIT was up 33.4% at €858m. 

Higher freights rates helped profitability, rising 2% to $1,097 per twenty foot equivalent unit (TEU) in the nine months. 

This trend partly results from tight supply. 

The world's idle fleet numerically represents 1.8% of total tonnage but in practice is "virtually zero," Habben Jansen said. 

But despite favourable profit numbers and strict cost management, he warned of demand falls further ahead as fallout from the pandemic will leave a lasting imprint on the global economy. 

"There is bound to be some sort of a weaker period in 2021 but we don't know how big the dent will be," he said.