Yemen Monitor/Reuters
German container shipping company Hapag-Lloyd announced on Wednesday a 75% drop in net profit in the first half of 2024, citing plans to avoid sailing in the Red Sea, which has been targeted by Houthi attacks, an expansion of the repercussions of the Zionist war on Gaza, until at least the end of the year.
CEO Rolf Habben Jansen said, “Although we were unable to match the exceptionally good results of the previous year, we achieved very good results in the first half of 2024 thanks to strong demand and better spot market prices.”
He added, “In the second half of the year, we will focus increasingly on continued growth and the high quality of our services.”
Hapag-Lloyd, the world’s fifth-largest container shipping company, said group net profit amounted to €732 million ($804.47 million) in the six months, down from €2.9 billion a year earlier.
The company recorded a 48% decline in earnings before interest, taxes, depreciation, and amortization (EBITDA) to €1.8 billion, while earnings before interest and taxes (EBIT) fell by 68% to €813 million.
Habben Jansen said Hapag-Lloyd had added new ships and containers in 2024 to meet additional capacity requirements resulting from the security situation in the Red Sea.
In dozens of attacks since November, Houthi militants in Yemen have disrupted global trade by forcing shipowners to avoid the popular short route to the Suez Canal.
The company expects full-year EBITDA to be between €3.2 billion and €4.2 billion. EBIT is likely to be between €1.2 billion and €2.2 billion.
Hapag-Lloyd emphasized that against the backdrop of highly volatile freight rates and major geopolitical challenges, forecasts are subject to a high degree of uncertainty.
Transport expenses also rose by 5% to €6.2 billion in the first half of the year, mainly due to higher fuel prices and increased spending on fuel as the Red Sea situation requires long alternative voyages around Africa.
