Standard & Poor’s upgrades Hapag-Lloyd’s rating by one level

The shipping company Hapag-Lloyd has been upgraded by the rating agency Standard & Poor’s (S&P) to a level of ‘BB-‘. Reasons for this include improved credit quality, confirmed by robust EBITDA, consistent cost management, and ongoing debt reduction. Additionally, a positive outlook for the company has been assessed.

(Hamburg) The rating agency Standard & Poor’s (S&P) has today published an updated report on Hapag-Lloyd. The credit rating has been raised by one notch from ‘B+’ to ‘BB-‘ with a ‘positive’ outlook. This is the highest credit rating that Hapag-Lloyd has received since S&P began its research in 2010. Additionally, the rating for senior unsecured bonds has been upgraded from ‘B-‘ to ‘B’.

S&P expects continuation of performance

S&P argued that it expects Hapag-Lloyd to continue its solid EBITDA performance from 2019 into 2020. It was also positively noted that Hapag-Lloyd’s strengthened cash flow generation, combined with the gradual reduction of debt from free operating cash flow in 2020, will lead to stronger credit metrics than previously expected. Furthermore, S&P acknowledged that Hapag-Lloyd has exceeded its cost reduction targets, improved its operational efficiency, reduced costs per shipped container, and enhanced its profitability. As a result, Hapag-Lloyd has achieved above-average EBITDA margins industry-wide in recent years. The positive outlook reflects S&P’s assessment that Hapag-Lloyd is capable of further reducing its debt levels and improving credit quality.

Hapag-Lloyd pleased with the recognition

“We are very pleased that our earnings strength and consistent cost management, as well as our efforts in debt reduction, are positively recognized with this S&P rating upgrade. Looking ahead, our prudent financial policy remains unchanged with a clear focus on profitability, cost control, debt reduction, and balance sheet stability. At the same time, we are focusing on the consistent implementation of our Strategy 2023,” said Mark Frese, CFO of Hapag-Lloyd AG.

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