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Hapag-Lloyd Upgrades Earnings Forecast

[ November 15, 2024   //   ]

Hapag-Lloyd AG said a third-quarter rebound in demand and freight rates led to a significant increase in earnings for the German container shipping group.
However, these results lag previous-year levels as expected, due to lower first-half 2024 freight rates and increased transport expenses from the rerouting of ships around the Cape of Good Hope to avoid the Red Sea, these results are below the prior-year level, as expected.
Hapag-Lloyd concluded the first nine months of 2024 with a group EBITDA of US$3.6 billion. Operating profit stood at US$1.9 billion and the group profit at US$1.8 billion. Revenue was US$14.8 billion, down a half percentage point for the first three quarters.
“The first nine months of 2024 were marked by unexpectedly strong demand. Despite the tense security situation in the Red Sea and the associated rerouting of ships, we were able to further increase our transport volume compared to the previous year and can look back on a good result overall,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.
In the Liner Shipping segment, transport volumes increased 5 percent in the first nine months of 2024 to 9.3 million 20-foot equivalent units, or TEUS. Segment revenues fell by 2 percent, to US$15 billion, due to a lower average freight rate of US$1,467/TEU compared to the same period last year (US$1,604/TEU). EBITDA decreased to US$3.5 billion, and EBIT fell to US$1.9 billion.
The Terminals and Infrastructure segment recorded a significant increase in sales and earnings in the nine-month period. EBITDA rose to US$114 million and EBIT to US$56 million. Since the segment was founded in the second half of 2023, the results are only comparable with the prior-year figures to a limited extent.
“We have commissioned an extensive newbuild program for 24 ships, with which we will further modernize and decarbonize our fleet and thereby secure our long-term competitiveness,” Jansen said. “In addition, we have made good progress in building up our terminal business under the Hanseatic Global Terminals brand. Looking ahead, we will continue to vigorously implement our Strategy 2030 while focusing on our growth and quality targets.”
In view of the recent higher-than-expected demand and improved freight rates – and despite increased transport expenses – Hapag-Lloyd’s executive board raised its forecast for the current financial year on Oct. 24, projecting group EBITDA in the range of US$4.6 billion to US$5 billion and group EBIT to be in the range of US$2.4 to US$2.8 billion. However, Hapag-Lloyd conditioned the forecast due to uncertainty in the highly volatile development of freight rates and persistent major geopolitical challenges.

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