Similar to other container carriers that have shown the same pattern so far during the first nine months of 2023 with reduced revenues and profit, Hapag-Lloyd books profit below the prior-year level.
The decline in the freight rates which are below the prior-year level hit the German carrier.
The first nine months of the 2023 financial year were characterised by weak demand and significantly lower freight rates for container transport, with a corresponding negative impact on the Group‘s revenue and earnings development.
The forecasts remained exposed to uncertainty amid geopolitical conflicts, and inflationary pressure.
To respond to this, the carrier is working now to reduce the expenses even more, by achieving savings on the procurement side, and by making adjustments to its service network.
Germany’s Hapag-Lloyd saw a decline in the profits which stood at $3.4 billion (€3.2 billion), in the first nine months of this year. The Group´s Ebitda was $4.5 billion (€4.2 billion) and the Ebit was $3 billion (€2.8 billion).
These results are significantly below the prior-year level due to the severe change in market conditions. With the further expansion of its terminal business, the Hapag-Lloyd Group’s business activities have also been split for the first time into Liner Shipping and Terminal and Infrastructure segments.
In the same period, the Group´s revenue fell by 47% to €14.1 billion, in comparison with €26.7 billion in the nine month period of the year 2022.
This decline was mainly due to the continuing fall in demand for container transport, the company said.
Rolf Habben Jansen, chief executive of Hapag-Lloyd AG, said: “Thanks to an increase in transport volumes in the third quarter, volumes are roughly flat for the nine-month period compared to 2022. At the same time, we have continued to implement our strategic agenda, expanded our terminal portfolio, and boosted customer satisfaction again through quality improvements.”
“However, freight rates are below the prior-year level and, as expected, fell again in the third quarter, which is reflected in much lower earnings. In response, we are working hard to reduce our expenses even more, such as by achieving savings on the procurement side and making adjustments to our service network. Nevertheless, if spot rates do not recover, we could face some challenging quarters in this subdued market environment.”
