Price and cost pressure burden Hapag-Lloyd - Hapag-Lloyd slashes profit forecast as shipping costs and volatility bite
Hapag-Lloyd, one of the world's leading container shipping companies, has revised its earnings forecast for the current fiscal year. Despite increased transport volumes, the company faces rising price and cost pressures.
Hapag-Lloyd now expects its earnings before interest and taxes (EBIT) to be between €0.5 billion and €1 billion for the current fiscal year. This comes after a challenging third quarter, where EBIT dropped by 80.4% to €190 million compared to the same period last year.
The company's CEO, Rolf Habben Jansen, described the market environment as highly volatile for the first nine months of the year. Increased transport volumes did not offset rising price and cost pressures. The launch of the Gemini shipping alliance and vessel congestion contributed to persistent costs. Despite this, Hapag-Lloyd's alliance with Maersk is already yielding initial cost savings.
Hapag-Lloyd operates a fleet of 305 vessels and employs 14,000 people in its liner shipping division, along with around 3,000 in its terminals and infrastructure segment. However, the company's revenue fell by 11.3% to approximately €4.7 billion in the third quarter compared to the same period last year. Net profit also decreased to €138 million, down from €955 million in the same period last year.
Hapag-Lloyd, despite facing significant challenges, has revised its earnings forecast for the current fiscal year. The company continues to operate a substantial fleet and employs a significant number of people. Its alliance with Maersk is expected to bring further cost savings.
