Germany’s Hapag-Lloyd has reported an almost tenfold surge in its first half profits to $3.3bn (€2.7bn), as freight rates increased ‘significantly’ due to scarce transport capacities.

The company’s average freight cost for a twenty-foot equivalent unit (TEU) container soared 46% to $1,612 in the first six months of 2021 compared to $1,104/TEU a year ago.

Revenues soared 51% year-on-year to $10.6bn.

Transport volumes were up to 6,004 TEU, up 4% from the prior year, which was hit by a fall in demand in Q2 due to the pandemic.

The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) rose to $4.2bn in the first half of 2021 while cash flow from operating activities increased to $3.8bn.

Hapag-Lloyd CEO Rolf Habben Jansen said: “In a market with very strong demand for container transports, we have benefitted from significantly improved freight rates and look back on a very good first half year.

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“Among other things, we were able to reduce our net debt by $1.5bn, although we paid out a significantly higher dividend compared to the prior year.”

According to the company, the high demand in the congested market environment is creating a shortage of available weekly transportation capacity.

As a result, Hapag-Lloyd anticipates strong earnings in the second half as well, with annual EBITDA expected in the range of $9.2-11.2bn.

Habben Jansen added: “We are naturally pleased by this extraordinary financial result. But the bottlenecks in the supply chains continue to cause enormous strains and inefficiencies for all market participants and we have to do our utmost to resolve them jointly as soon as possible.

“Looking at the market environment today, we however do not believe that the situation will return to normal any time soon despite all the efforts made and the additional container box capacity that is being injected. We currently expect the market situation only to ease in the first quarter of 2022 at the earliest.”

Last month, the German container line completed the purchase of Dutch container shipping firm NileDutch Investments BV (NileDutch) after securing the antitrust clearance.