Hapag-Lloyd has concluded the first quarter of 2023 with lower volumes and declining profits, as weaker global demand impacted operations.
The shipping company reported an EBITDA of $2.4 billion.
EBIT decreased to $1.9 billion compared to the same quarter last year, and the Group profit also stood below the prior-year level, at $2 billion.
Transport volumes were 4.9 per cent lower than in the first quarter of last year, at 2.8 million TEU from 2,98 million TEU.
According to Hapag-Lloyd, this is down to local destocking and weaker overall global demand.
READ: Hapag-Lloyd closes 2022 at $18.5 billion profit
In addition, the lower average freight rate of $1,999 per TEU, reflecting a 28 per cent decrease from $2,774 per TEU in Q1 2022.
This was particularly responsible for the decline in revenue, which decreased to $6 billion, Hapag-Lloyd reported.
Transport expenses remained at the prior-year level of $3.3 billion.
The lower transport volumes were accompanied by inflation-related cost increases and a higher bunker consumption price, of $645 per tonne. This reflects a 5.2 per cent decrease from $613 per tonne in Q1 2022.
For the full year 2023, Hapag-Lloyd confirms EBITDA is expected to be in the range of $4.3 to $6.5 billion and EBIT to be in the range of $2.1 to $4.3 billion.
However, the ongoing war in Ukraine, other geopolitical uncertainties and persistent inflationary pressures are creating risks that could negatively impact the forecast, reported Hapag-Lloyd.
READ: Hapag-Lloyd anticipates inevitable 2023 decline
“The market environment has normalised, with corresponding declines in demand and freight rates,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.
“This will undoubtedly have an impact on our earnings over the course of the year, so we will be keeping a very close eye on our costs.
“In addition, we are pressing ahead on further developing our Group’s ‘Strategy 2030’, which will focus on quality and sustainability,” Jansen added.
In April, the company completed its acquisition of 40 per cent shareholding in J M Baxi Ports & Logistics Limited (JMBPL) previously approved by the relevant antitrust authority.
More recently, Hapag-Lloyd launched “Ship Green”, a new solution for climate-friendly transportation based on biofuel.