Hapag group Q12024 profit drops 84% on weak freight rates
Average freight rate declined 32% to $1,359 per TEU in first quarter of 2024 compared to $1,999 in Q12023
Hapag-Lloyd group reported a 84 percent decline in profit at $325 million for the first quarter of 2024 on weak freight rates. While group revenue was down 24 percent to $4.7 billion, EBIT decreased to $396 million.
Average freight rate declined 32 percent to $1,359 per TEU compared to $1,999 in Q12023, says an official release. The transport volumes for the first quarter of 2024 increased by 6.8 percent to three million TEU (Q12023: 2.8 million TEU). "Although costs rose significantly as a result of the rerouting of ships around the Cape of Good Hope, these were largely offset by active cost management. Revenues decreased to $4.6 billion, primarily owing to a lower average freight."
In the Terminal & Infrastructure segment, revenue came in at $107 million with an EBITDA of $35 million and an EBIT of $18 million, the update added. "The new segment was only created in the second half of 2023 and is currently in the process of being established. For this reason, the figures for the first quarter of 2024 are only comparable with the prior-year figures to a limited extent."
Rolf Habben Jansen, CEO, Hapag-Lloyd says: "Even though our results are significantly below the exceptionally strong figures from the previous year owing to the normalisation of supply chains, we are pleased to have got the new year off to a good start. The rates stabilised in the first quarter due to the rerouting of ships around the Cape of Good Hope and higher demand for capacity. The numerous new ships that have and will be delivered across the industry in 2024 have been instrumental to keep the supply chains going without too much disruption. Going forward, we must keep a close eye on our costs, and we will continue the implementation of our Strategy 2030 – with main focus on our decarbonisation initiatives and our promise to be the undisputed number one for quality for our customers."
As on March 31, 2024, Hapag-Lloyd’s fleet consisted of 280 container ships with a transport capacity of 2.1 million TEU. "On January 17, 2024, Hapag-Lloyd and Maersk announced that they have reached an agreement for a new, long-term operational co-operation called Gemini Cooperation, which is scheduled to start in February 2025 and will be limited to the major East-West trades between the Far East, North America and Europe. As a result of the new partnership, Hapag-Lloyd will leave THE Alliance in January 2025. Maersk and MSC had already announced in January 2023 that the 2M Alliance would be terminated in January 2025."
The Hapag-Lloyd Group employed a total of 16,576 people at the end of March 31, 204 (March 31, 2023: 14,108).
2024 outlook
The board is now expecting to close 2024 with a group EBITDA of $2.2-3.3 billion and group EBIT to be in the range of $0-1.1 billion. "Against the backdrop of very volatile freight rates and major geopolitical challenges, the outlook is subject to a high degree of uncertainty," the update added.
