Hapag Q1 profit down 57% on lower rates, volumes
Avg freight rate declined 28% to $1,999/TEU (Q12022: $2,774/TEU) due to weaker demand and normalisation of supply chains
Hapag-Lloyd reported a 57 percent decline in group profit at $2 billion for the first quarter ended March 31, 2023 on weak demand and declining freight rates for container transports.
"Hapag-Lloyd’s transport volume in the first quarter of financial year 2023 was 2,842 TTEU, 4.9 percent below the prior-year level of 2,987 TTEU," says an official release.
The average freight rate declined 28 percent to $1,999/TEU (prior year period: $2,774/TEU) due to weaker demand and normalisation of supply chains, the release added.
While revenue declined 33 percent to $6 billion, EBITDA dropped 55 percent to $2.4 billion and EBIT to $1.9 billion compared to the same quarter last year.
“Despite declining results, we have made a robust start to the current financial year," says Rolf Habben Jansen, CEO, Hapag-Lloyd. "The market environment has normalised with corresponding declines in demand and freight rates. 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."
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/t (Q1 2022: $613/t), the release added.
The increase in transport volumes in the Atlantic trade is mainly due to the gradual easing of local port congestion and the resulting higher container throughput, the release said. "The increase in transport volumes in the Africa trade is mainly due to the acquisition of the container liner business of Deutsche Afrika-Linien GmbH & Co. KG (DAL) in the second quarter of the 2022 financial year. In the Far East and Middle East trades, in particular, a steady decline in demand for container transport, which was mainly due to inflation in Europe, led to a drop in transport volumes."
For the full year 2023, Hapag-Lloyd confirms EBITDA to be in the range of $4.3-6.5 billion and EBIT to be in the range of $2.1-4.3 billion. "However, the ongoing war in Ukraine, other geopolitical uncertainties and persistent inflationary pressures are creating risks that could negatively impact the forecast."