Hapag-Lloyd expects profit to shrink further this year following a stark drop in 2023.
The world’s fifth-largest liner operator announced on Thursday that it expects 2024 Ebitda earnings to range between $1.1bn and $3.3bn, compared with $4.83bn last year.
Excluding depreciation and amortisation, Ebit may even cross into negative territory, expected to range from minus $1.1bn to plus $1.1bn, compared with $2.74bn in 2023.
“We have got the current financial year off to a satisfactory start, but the economic and political environment continues to be volatile and challenging — especially in view of the current situation around the Red Sea,” the company said in an earnings statement.
“We therefore expect to see an overall decrease in earnings in 2024.”
Even this forecast “remains subject to considerable uncertainty given the volatile development of freight rates and geopolitical challenges”.
The 2024 forecast comes against the background of an already sharp earnings decline.
The group slid into a $234m net loss in the fourth quarter, compared with profit of $3.3bn a year earlier.
Hapag-Lloyd, however, stayed in the black for the full year, although profit declined at an annual pace of 82% to $3.19bn, mainly a result of the average freight rate dropping to $1,500 per teu from $2,863 per teu in 2022.
Profit had soared to such giddy levels in the wake of the Covid-19 pandemic in 2022, however, that even the starkly reduced 2023 profit is the third-highest ever in the company’s history.
This allowed it to propose a dividend of €9.25 ($10.12) per share to shareholders — its third-highest payout ever.
The priority now is to “focus even more intensively on quality and sustainability”, in line with Hapag-Lloyd’s long-term strategy for 2030, said chief executive Rolf Habben Jansen, whose term was renewed on Thursday, well ahead of expiry, to 2029.
“We will continue to grow in our new terminal and infrastructure business as well as our share and portfolio of hinterland transports,” he said, adding that the company will, at the same time, improve cost efficiency and productivity.
As part of such efforts, it announced on 22 January the acquisition of UK road haulier ATL Haulage Contractors.
In a shock announcement earlier that month, Hapag-Lloyd said it would leave THE Alliance and start a new alliance with AP Moller-Maersk, called the Gemini Cooperation, from February 2025.
