Standard & Poor’s upgrades Hapag-Lloyd’s rating

The American rating agency Standard & Poor’s Global Rating (S&P) has upgraded Hapag-Lloyd’s credit rating from BB to BB+ with a “stable” outlook, while the company’s senior unsecured bond rating was also upgraded from BB to BB+.

S&P claimed that Hapag-Lloyd’s preliminary earnings before interest, taxes, depreciation and amortization (EBITDA) of US$12.46 billion (€10.9 billion) in 2021 quadrupled year-on-year, exceeding the rating agency’s forecast made in March last year by a factor of two.

“We are very pleased that S&P has again positively recognised our improved earning power and the continuous optimisation of our balance sheet structure with this third upgrade within the last two years,” said Mark Frese, chief financial officer of Hapag-Lloyd.

The positive operating performance was driven in particular by a “steady and unexpected” increase in freight rates, which S&P expects to remain elevated at least until the end of 2022.

Additionally, the strong cash flow is anticipated to bolster Hapag-Lloyd’s financial headroom in the event of moderation in freight rates, rising fleet investment needs, and possibly another discretionary spending.

Positively mentioned was also Hapag-Lloyd’s prudent financial policy, according to a statement.

“Looking ahead, we will continue to consistently implement our Strategy 2023, maintaining our prudent financial policy while keeping a close eye on our costs,” noted Frese.