Hapag-Lloyd reports strong H1 result, challenging and uncertain outlook

Hapag-Lloyd reported an H1 2024 profit of $791 million sharply down on the $3.13 billion profit it reported in the same period of 2023 which saw the tail end of the positive impact from the pandemic. Despite first half 2024 profitability being much lower than a year earlier it was above the line’s expectations.

“Even though we were unable to match the exceptionally good results of the prior year, we delivered a very good first half of 2024 thanks to strong demand and better spot rates,” commented Rolf Habben Jansen, CEO of Hapag-Lloyd.

The group reported revenues of $9.52 billion for the first half of 2024 down from $10.85 billion in the same period in 2023.

Reflecting improved demand for container shipping volumes for Hapag-Lloyd’s liner shipping business were up 5% at 6.1 million teu in H1 2024 compared 5.8 million teu in the same period a year earlier. Average freight rates reported by the line in H1 this year were $1,391 per teu compared to $1,761 per teu in the same period last year, despite having increased at the end of the first half of 2024.

The better-than-expected performance in the first half of 2024 results from the impact of Houthi attacks on shipping in the Red Sea which has led to virtually all services from top container lines that transited the Red Sea and Suez Canal being diverted via the Cape of Good Hope. Rerouting has absorbed a large volume of new tonnage that has been delivered into the market in the first six months of the year.

Related:Hapag-Lloyd raises 2024 guidance on Red Sea rate support

“We have added several new ships and containers to our fleet. This has helped us to meet the additional capacity requirements resulting from the security situation in the Red Sea and the rerouting of ships around the Cape of Good Hope, thereby keeping supply chains intact,” Habben Jansen said.

Looking ahead much even with continued rerouting of Asia – Europe/Med services and Asia – US East Coast services via the Cape of Good Hope due to the security situation in the Red Sea the large volume of newbuildings being delivered into the global container shipping fleet could start reverse tonnage supply constraints.

“The number of vessel deliveries made and planned over the course of the year could counteract the resulting capacity bottleneck in tonnage and should prevent lasting disruptions to the supply chain. For these reasons in particular, the Executive Board considers the remainder of the 2024 financial year to be challenging and subject to a high degree of uncertainty,” Hapag-Lloyd stated.

On 9 July the company raised its full year earnings forecast to an EBIT of $1.3 - $2.4 billion, up from breakeven to $1.1 billion previously

Related:Hapag-Lloyd aims to consolidate position in top 5 container lines