Hapag-Lloyd has released its first full year results after the start of the ‘Gemini’ co-operation with Maersk. Due to the continuing problems in the Red Sea and other beneficial effects on the container shipping market’s balance of supply and demand, the performance of the company was reasonable.
Revenue was up 6.6% year-on-year at US$20.7bn, whilst profits in terms of EBITDA (Earnings Before Interest, Depreciation and Amortisation) were 4.2% higher than in 2023 at $5bn. EBIT (Earnings Before Interest and Tax) was up just 2% at $2.788bn due to higher depreciation costs, whilst Hapag Lloyd said that Group Profit fell by 19% year-on-year due to a lower contribution from interest income.
For the core container shipping business, profits edged-up, with EBITDA up 2% year-on-year and EBIT flat. The number of containers transported was 5% higher, but the freight rate charged by Hapag Lloyd was 1% lower than in 2023. The cost environment was tough, with a 7% increase in related expenses, although much of this was driven by the operational implications of the Cape of Good Hope route.
In discussing the results, Hapag-Lloyd’s CEO, Rolf Habben-Jansen, said that freight rates were quite volatile from quarter to quarter, even if the decline over the year was not so great. The average rate for the year at Hapag Lloyd was $1564 per TEU. The new terminal business at Hapag Lloyd, saw a revenue of $434m and an EBITDA of $151m, doubling the profits of the preceding terminal business owned by Hapag Lloyd.
Looking at these numbers, the prospects for Hapag-Lloyd seem more stable than might be perceived in present market conditions. The company portrayed the market as well balanced between supply and demand, with the rate of ‘new-builds’ slowing, the number of idle vessels low, newer ships are needed yet scrappage is minimal. Hapag-Lloyd did admit that the Red Sea issue and the wider trade environment were unpredictable. However, perhaps the most important issue facing Hapag-Lloyd over the next twelve months is the competitiveness of the Gemini co-operation with Maersk.
Author: Thomas Cullen
Source: Ti Insight
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