Hapag-Lloyd: Solid Q3 Profits, Uncertainty in Q4

Hapag-Lloyd: Solid Q3 Profits, Uncertainty in Q4

In a recent financial update, German carrier Hapag-Lloyd disclosed a net profit of USD 293 million for the third quarter, showcasing resilience in the face of market challenges. However, concerns loom as the company revised its full-year forecast, hinting at the potential for operating losses in the fourth quarter.

During Q3, Hapag-Lloyd experienced a 58% decline in revenues, reaching USD 4.5 billion, while the operating profit (EBIT) dropped to USD 228 million. The accumulated EBIT for the nine months of the year amounted to USD 3.0 billion.

In response to the evolving market conditions, the company adjusted its full-year EBIT forecast to a range of USD 2.4 billion to USD 3.4 billion. This adjustment implies a possible operating earnings span of between -USD 600 million and +USD 400 million for the final quarter of the year. CEO Rolf Habben Jansen emphasized that the outcome would hinge on spot rate recovery in key markets.

Despite a positive demand trend in Q3, characterized by a 4.5% year-on-year increase in liftings to 3.1 million TEU, the overall volume for the nine months remained largely unchanged at 8.9 million TEU, registering a slight 0.8% dip compared to the same period in 2022. Habben Jensen anticipated that liftings would remain “more or less flat” for the entire year, a better outcome than initially predicted.

However, challenges persist as shipping rates continue to decrease, now reaching pre-COVID levels or even lower. Rising costs, attributed to inflation, fuel prices, and increased time charter rates, further compound the company’s financial landscape. While Hapag-Lloyd aims to focus on cost control, unlike some industry peers, it does not foresee significant staff adjustments.

In a strategic move, Hapag-Lloyd introduced a new reporting structure, separating terminal infrastructure as a distinct segment for the first time. The company will operate two divisions moving forward: Liner Shipping and Terminal & Infrastructure. Dheeraj Bhatia is set to assume the role of CEO for the Terminal holding in January.

The newly formed Terminal & Infrastructure segment reported EBITDA of EUR 35.5 million (USD 38.0 million) and EBIT of EUR 27.1 million for the first nine months of 2023. The company anticipates further asset growth over a medium-term horizon of 5-7 years, incorporating entities such as SAAM, Grupo Spinelli, JM Baxi, CTA in Rotterdam, and investments in Tanga, Damietta, and Wilhelmshaven.

Looking ahead, Hapag-Lloyd aims to strengthen its position in the Brazilian market by launching the Norcoast joint venture for cabotage services in Q1 2024. The move underscores the company’s commitment to enhancing its presence in Brazil, a market deemed crucial for its future growth.

Fuente: Alphaliner, Hapag-Lloyd

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