Hapag-Lloyd has upgraded the lower end of its full-year profit forecast after a strong start to the year.

The world’s fifth-largest liner operator announced on Wednesday that it expects 2024 Ebitda earnings to range between $2.2bn and $3.3bn, compared with $4.83bn in the previous year.

The lower end of that forecast is more than $1bn higher than the company had expected just two months ago.

Excluding depreciation and amortisation, Hapag Lloyd’s Ebit is expected to remain in positive territory in the range of zero up to $1.1bn.

Most of that will come on the back of profit to be made in the first six months of the year.

The company said group profit in the first quarter was $325m. That is massively down from just over $2bn in the same quarter last year.

However, the result reversed a $234m net loss in the fourth quarter of 2023.

“Even though our results are significantly below the exceptionally strong figures from the previous year owing to the normalisation of supply chains, we are pleased to have got the new year off to a good start,” chief executive Rolf Habben Jansen said.

“The rates stabilised in the first quarter due to the rerouting of ships around the Cape of Good Hope and higher demand for capacity.”

“The numerous new ships that have and will be delivered across the industry in 2024 have been instrumental to keep the supply chains going without too much disruption.”

The revised forecast comes after the company concluded the first quarter of 2024 with a group Ebitda of $942m, down from $2.3bn.

Eye on costs

Compared to the same quarter of the previous year, the group Ebit decreased $1.47bn to $396m.

Group revenues decreased to $4.6bn from $6bn, mainly owing to a lower average freight rate of $1,359 per teu, down from $1,999 in the same quarter last year.

Nearly all of the profit came from liner shipping, where transport volumes for the first quarter of 2024 increased by 6.8% to 3m teu.

Transport expenses were on a par with the same quarter of the previous year, at $3.3bn.

Compared to the same quarter of the previous year, the Ebitda for its liner division decreased to $906m and the Ebit to $378m

Its newly formed Terminal & Infrastructure segment logged Ebitda of $35m and Ebit of $18m in the quarter.

Although costs rose significantly as a result of the rerouting of ships around the Cape of Good Hope, these were largely offset by active cost management, the company said.

“Going forward, we must keep a close eye on our costs,” Habben Jansen said.

The company would continue the implementation of its Strategy 2030, a road map for the next six years, he added.

That strategy requires Hapag-Lloyd to grow faster than the market by investing in its core liner business, while expanding its terminal portfolio and growing its inland transport sector.

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