The business activities of Hapag-Lloyd were split into Liner Shipping and Terminal & Infrastructure segments, with the latter reporting separately due to the expansion of the terminal business. In the Liner Shipping segment, EBITDA decreased to USD 4.5 billion, EBIT fell to USD 3.0 billion, and revenues dropped to USD 15.2 billion. The decrease was attributed to lower average freight rates, notably in Q3 2023, at USD 1,312/TEU. However, transport volumes improved by almost 5 per cent in the third quarter, reaching 3,110 TTEU.
Transport expenses saw a year-on-year decrease of 11 percent, amounting to USD 9.6 billion, influenced by the normalization of global supply chains and a lower average bunker consumption price of USD 611 per tonne.
In the Terminal & Infrastructure segment, which is still in the process of formation, EBITDA and EBIT for the first nine months of 2023 were USD 38 million and USD 29 million, respectively. This segment includes Hapag-Lloyd’s stakes in 20 terminals across regions.
Rolf Habben Jansen, the CEO of Hapag-Lloyd AG, acknowledged challenges in the subdued market environment, emphasizing efforts to reduce expenses and make adjustments to the service network.
“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,” Jansen said.
The company’s full-year 2023 forecast specifies an EBITDA range of USD 4.5 to 5.5 billion and an EBIT range of USD 2.4 to 3.4 billion, with uncertainties due to geopolitical conflicts, inflationary pressures, and high customer inventory levels.
Photo credits @ Col André Kritzinger, CC BY-SA 3.0, via Wikimedia Commons