Container shipping line Hapag-Lloyd has lost more than $1.38 billion and seen its stock plummet by 20% in value since downgrading its profit forecast on Friday.
It predicted an EBIT figure between $230 million to $540 million, while its EBITDA figure is expected to be around $1 billion this year, compared to $1.22 billion in 2017.
In a statement, Hapag-Lloyd blamed the losses on “expectantly significant and continuing increase in the operational costs since the beginning of the year, especially with regard to fuel-related costs and charter rates combined with a slower than expected recovery of freight rates.
“These developments cannot be fully offset by cost-saving measures that have already been initiated.”
Find out how the container industry fared in 2017 in a Port Technology technical paper
The losses come despite Hapag-Lloyd significantly cutting losses from this time last year.
It lost $41 million in the first quarter, down from $67 million in the first quarter of 2017.
This is a result of it streamlining its operations, as well as its merger with United Arab Shipping Company (UASC) in 2017.
Hapag-Lloyd is not alone in having profit woes as surging oil prices have forced analysts to drastically downgrade industry profit expectations in 2018, despite growth in demand and sales and some lines finishing 2017 strongly.
Maersk missed its first-quarter expectations when it released its figures in May, but Yang Ming and CMA-CGM both posted good profit figures for 2017.
