Hapag-Lloyd Warns of Further Earnings Decline in 2024

Economic, Political Climate Puts Pressure on Profits
A Hapag-Lloyd containership
The Toronto Express containership, operated by Hapag-Lloyd, is seen at the Port of Hamburg in Hamburg, Germany, in December of 2023. (Maria Feck/Bloomberg News)

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Following a slump in profits in 2023, German container shipping company Hapag-Lloyd expects earnings to decline again in 2024.

“We have made a satisfactory start to the current financial year, but the economic and political environment remains volatile and challenging — especially in view of the current situation around the Red Sea,” the Hamburg, Germany-based company said March 14 when presenting its annual report for the previous year. “We therefore anticipate an overall decline in earnings for 2024.”

The executive board expects earnings before interest and taxes to be in a range of a loss of 1.1 billion euros ($1.2 billion) to a gain of 1.1 billion euros. By comparison, EBIT in 2023 was 2.5 billion euros, compared to 17.5 billion euros in 2022, which was a record for the company.

Major shipping companies including Hapag-Lloyd are increasingly avoiding the shortest sea route between Asia and Europe through the Red Sea amid attacks by Yemen’s Houthi rebels on commercial vessels and sailing around South Africa’s Cape of Good Hope instead.

The Houthis say they want to force an end to the Israeli attacks in the Gaza Strip, which followed the unprecedented massacre by the Palestinian Islamist organization Hamas in Israel on Oct. 7. However, many of the ships that have come under fire have no connection to Israel.

Meanwhile, the supervisory board of Hapag-Lloyd extended the contract of CEO Rolf Habben Jansen ahead of schedule. Instead of running until 2027, the contract now runs until the end of March 2029.

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“Rolf Habben Jansen has done an excellent job for Hapag-Lloyd for almost a decade,” said the chairman of the supervisory board and Habben Jansen’s predecessor, Michael Behrendt. “He has continuously developed the company strategically, significantly internationalized it and kept it safely on course for growth despite occasional rough seas.”

Hapag-Lloyd ranks No. 13 on the Transport Topics Top 50 list of the world’s largest global freight companies.

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