Hapag-Lloyd profits dip amidst challenging shipping industry

Hapag-Lloyd: Solid Q3 Profits, Uncertainty in Q4

In a recent financial report, German shipping giant Hapag-Lloyd unveiled a net profit of USD 1.1 billion (EUR 1.0 billion) for the second quarter, marking a substantial 78% decline compared to the same period last year. The company’s operating profits also took a hit, slipping below the billion-dollar mark for the first time since the first quarter of 2020, settling at USD 888 million (EUR 808 million), according to Alphaliner.

The downward trend in earnings was mirrored by a decrease in average rates, with Hapag-Lloyd earning an average of USD 1,533 per TEU (twenty-foot equivalent unit) during the quarter. This represented a significant drop from the USD 2,935 recorded a year prior, as well as a decrease from the USD 1,999 achieved in the preceding quarter.

Despite the challenging landscape, there were some modest gains in volume performance. While year-on-year liftings saw a 2.0% decline, there was a 4.3% increase when compared to the first three months of the year. Noteworthy improvements were observed in trades involving the Transpacific, intra-Asia, and Africa routes. However, Far East volumes remained stagnant in comparison to Q1.

Taking a broader view of the first half of the year, Hapag-Lloyd encountered a decrease in volumes across major routes. Transport volumes experienced a 3.4% year-on-year decline for the January-June period, amounting to 5.8 million TEUs. This contrasted with the 6.0 million TEUs recorded during the same period in 2022. The decline was primarily attributed to weakened demand for transport on routes connecting the Far East and European trade to North America.

On a positive note, Hapag-Lloyd benefited from a reduction in transport expenses during the six-month period. Expenditures for demurrage and detention, coupled with a decline in bunker consumption prices to USD 625 per tonne (down from USD 703 per tonne in H1 2022), contributed to the decrease. Total transport expenses for the first half of the year were reported at USD 6.3 billion (EUR 5.9 billion).

In contrast to some competitors, such as Maersk, which recently revised its financial forecast for 2023 upwards, Hapag-Lloyd is maintaining its guidance for the year. The company’s projected earnings before interest and taxes (EBIT) for 2023 range between USD 2.1 billion and USD 4.3 billion. This figure is notably lower than the EUR 17.5 billion in EBIT recorded in the preceding year, 2022.

Hapag-Lloyd has been strategically expanding its presence in the terminal segment. Notable acquisitions during the first half of the year include a 49% minority interest in the Spinelli Group in January, a 40% interest in J M Baxi ports & Logistics in April, and the successful acquisition of SAAM’s terminal business, finalized just outside the first half on August 1st.

As the shipping industry navigates a complex and dynamic environment, Hapag-Lloyd remains focused on optimizing its operations and managing challenges to deliver value to its stakeholders.

Fuente: Hapag Lloyd, Alphaliner

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