Hapag-Lloyd Warns of Challenging Market Amid Subdued Freight Demand

By Adria Calatayud

Hapag-Lloyd warned it could face challenging quarters ahead if spot freight rates don't recover, and narrowed its 2023 earnings guidance toward the lower end of its prior range.

The German shipping company said Thursday that it now expects earnings before interest, taxes, depreciation and amortization for the full year to be between 4.1 billion and 5 billion euros ($4.39 billion-$5.36 billion), and earnings before interest and taxes of between EUR2.2 billion and EUR3.1 billion.

The company previously forecast Ebitda of between EUR4.0 billion and EUR6.0 billion, and EBIT of between EUR2.0 billion and EUR4.0 billion.

Hapag-Lloyd said a subdued market environment is taking a toll on its results, as a recovery in transport volumes in the third quarter didn't mitigate a further decline in freight rates.

"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," Chief Executive Rolf Habben Jansen said.

Net profit for the quarter plunged to EUR257.6 million from EUR5.12 billion a year before.

Revenue more than halved to EUR4.10 billion, while Ebitda dropped to EUR678.8 million from EUR6.34 billion.

Hapag-Lloyd's results come after larger peer A.P. Moller-Maersk last week said it would cut more than 10,000 jobs, adjusting to a new normal in the industry following the end of pandemic-fueled cargo boom.

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

November 09, 2023 02:11 ET (07:11 GMT)

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