Hapag-Lloyd faces significant decline in earnings

Hapag-Lloyd releases 2023 annual report

Hapag-Lloyd has published its annual report for 2023, which conveys a significant decrease in earnings.

According to the report, the Group’s EBITDA was €4.5 billion ($4.8 billion). The Group’s EBIT decreased year-on-year (YoY) to €2.5 billion ($2.7 billion), and the Group’s profit was €3 billion ($3.2 billion).

Rolf Habben Jansen, CEO of Hapag-Lloyd AG, said: “We achieved the third-best group profit in the history of our company – even if it is significantly lower than it was in the exceptionally strong year 2022 due to the normalisation of global supply chains. We were able to considerably boost customer satisfaction and the digitalisation of our container fleet.

“We significantly expanded our business in the Terminal & Infrastructure segment and grew our liner shipping activities in India and Africa. We reduced our carbon footprint, taking another step towards our goal of becoming net-zero carbon by 2045.”

Transport volumes in the Liner Shipping category increased by 0.5 per cent in 2023 to 11.9 million TEU.

READ: Hapag-Lloyd, Ankeri Solutions ink decarbonisation deal

Transport expenses fell 11 per cent to €11.9 billion ($12.9 billion), owing mostly to decreased demurrage and container storage fees, as well as a lower fuel consumption price.

Revenues fell to €17.8 billion ($19.2 billion), largely due to a reduced average freight rate of 1,500 USD/TEU.

In 2023, EBITDA fell to €4.4 billion ($4.8 billion) compared to 2022. The EBIT dropped to €2.5 billion ($2.7 billion).

The Terminal & Infrastructure division produced EBITDA of €46 million ($50 million) and EBIT of €19 million ($21 million) in the fiscal year 2023.

READ: Hapag-Lloyd announces rate increase

Hapag-Lloyd reported that revenues were €187 million ($202 million). The German shipping line noted that because the new section is still in the process of being developed, it does not reflect the outcomes of the whole fiscal year.

In light of another very good earnings trend, Hapag-Lloyd AG’s Executive Board and Supervisory Board have decided to propose to the Annual General Meeting a dividend of €9.25 ($10.12) per share for the fiscal year 2023, which would total €1.6 billion ($1.75 billion) and be the third-highest amount ever paid out by Hapag-Lloyd.

For the current fiscal year 2024, Hapag-Lloyd AG’s Executive Board anticipates Group EBITDA in the range of €1 to 3 billion ($1.1 to 3.3 billion) and Group EBIT in the range of $ − 1.1 to 1.1 billion.

However, given the volatility of freight prices and geopolitical risks, this estimate remains highly questionable, reported the carrier.

Rolf Habben Jansen added: “We have got the current financial year off to a satisfactory start, but the economic and political environment continues to be volatile and challenging – especially given the current situation around the Red Sea.

“We therefore expect to see an overall decrease in earnings in 2024. As part of our Strategy 2030, we will be focusing even more intensively on quality and sustainability.”

Recently, Hapag-Lloyd announced it would enhance its operations in the African continent by updating its West-Europe-West-Africa (WWA) and West Africa Express (WAX) services.

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