Hapag-Lloyd expects lower profits in 2024

German shipping giant Hapag-Lloyd has released its financial results for 2024, revealing a complex picture of growth and challenges across its business segments.

While liner transport volume rose to 12.5 million twenty-foot equivalent units, up from 11.9 million TEUs, average freight rates declined to $1,492 from $1,500 per TEU in 2023. This combination resulted in segment revenue of $20.3 billion, up from $19.2 billion in 2023. However, profitability metrics showed mixed results, with earnings before interest, taxes, depreciation and amortization  (EBITDA) increasing slightly to $4.9 billion, while earnings before interest and taxes (EBIT) remained nearly flat at $2.7 billion.

Hapag-Lloyd (OTC: HPGLY

) expanded its fleet capacity and container volumes. The company operated 299 vessels in 2024, up from 266 the previous year. This expansion increased aggregate vessel capacity to 2,346,000 TEUs and container capacity to 3,654,000 TEUs.

The Terminal & Infrastructure segment, a relatively new focus area for Hapag-Lloyd, showed promising growth. Revenue more than doubled to $433 million, with EBITDA and EBIT also seeing significant increases to $150 million and $71.3 million, respectively.

At the group level, Hapag-Lloyd reported total revenue of $20.6 billion, an increase from $19.4 billion in 2023. Group EBITDA rose to $5.02 billion, while EBIT reached $2.8 billion. The group’s net profit declined to $2.6 billion from $3.2 billion the previous year, resulting in earnings per share of $14.72. The company saw higher operating expenses from longer vessel voyages diverting away from the Red Sea region and around Africa’s Cape of Good Hope, the company said in an earnings release.

“In a challenging market environment, we achieved solid results and further increased customer satisfaction,” said Rolf Habben Jansen, chief executive of Hapag-Lloyd AG, in the release. “We have further consolidated and expanded our terminal business under the Hanseatic Global Terminals brand. Finally, we launched the largest newbuild program in our company’s history, which will enable us to further modernize and decarbonize our fleet.”

Hapag-Lloyd maintained a strong financial position, with equity rising to $22.4 billion and an improved equity ratio of 61.6%. The company’s net liquidity position decreased to $983 billion, reflecting ongoing investments and market challenges.

Efficiency metrics showed slight declines, with EBITDA margin falling to 24.3% and EBIT margin to 13.5%. Return on invested capital also decreased, to 14.1%.

For 2025, Group EBITDA is expected to be in the range of $2.5 billion to $4 billion, and  Group EBIT from zero to $1.5 billion. The company cited “considerable uncertainty” due to volatile freight rates and major geopolitical challenges.