Hapag-Lloyd reveals 75 percent decline in H1 profits, focuses on growth amid geopolitical challenges
Date
8/14/2024 8:58:37 AM
(MENAFN) German shipping giant Hapag-Lloyd announced a substantial 75 percent decrease in net profit for the first half of 2024, totaling 732 million euros (USD804.47 million), down from 2.9 billion euros in the same period last year. Despite this dramatic decline, the company remains optimistic about its full-year earnings, buoyed by robust demand and favorable spot market prices. CEO Rolf Habben Jansen highlighted that although the results were not as exceptional as the previous year, the company achieved solid performance in the first half due to strong market conditions and better pricing. Looking ahead, Hapag-Lloyd plans to focus on sustaining growth and enhancing service quality throughout the remainder of the year.
The drop in profit comes amid rising transport costs, which increased by 5 percent to 6.2 billion euros during the first half of 2024. This rise in expenses is attributed to higher fuel prices and longer routes necessitated by the ongoing security situation in the Red Sea. Since November, attacks by Yemen's Houthi rebels have disrupted shipping routes, forcing vessels to avoid the Suez Canal and opt for the more circuitous route around the Cape of Good Hope. In response, Hapag-Lloyd has added new vessels and containers to its fleet to accommodate the increased capacity demands.
Hapag-Lloyd's CEO Jansen also indicated that the company intends to avoid sailing through the Red Sea for the rest of the year due to the security risks, opting instead for the longer route around Africa. The company's financial outlook remains cautious, reflecting the significant volatility in freight rates and geopolitical uncertainties impacting global shipping and trade.
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