Hapag-Lloyd posts Q4 operating loss as Red Sea crisis weighs on volumes
Reuters
Published Jan 30, 2024 06:59
Updated Jan 30, 2024 11:05
By Rachel More and Elke Ahlswede
BERLIN (Reuters) -Hapag-Lloyd posted a wider-than-expected fourth-quarter operating loss due to lower transport volumes following the attacks on ships in the Red Sea, sending the container shipping group's shares down sharply.
The company swung to a fourth-quarter loss before interest and tax of around 200 million euros ($217 million), compared with a 3.3 billion profit in the same period last year. The LSEG estimate was for a 134 million loss in the period.
"The conflict in the Red Sea negatively impacted transport volumes at the end of the year, as the rerouting of ships around the Cape of Good Hope extended voyage times," Hapag-Lloyd said as it released preliminary results for 2023.
Hapag-Lloyd's shares were 8.5% lower at 1052 GMT. The fall almost wiped out year-to-date gains that have also been attributed to the Red Sea transport crisis in the form of higher freight rates in 2024.
"The Hapag Lloyd results appear to be slightly worse than consensus estimates at EBIT, though clearly there will be little focus on Q4 2023 events at this point, given the subsequent Red Sea situation," JP Morgan said.
Several large container shipping groups have decided to skip the Red Sea and Suez Canal, resulting in higher rates but also longer delivery times as ships are diverted around the Cape of Good Hope.
Hapag-Lloyd, world's number five container shipper by transport capacity, had benefited from soaring prices for its services in 2022, as global trade faced several hiccups during its recovery from the COVID-19 crisis. The company reported its biggest ever annual profit for that year.
Earnings before interest and tax (EBIT) came in at 2.5 billion euros in 2023, down from 17.5 billion a year earlier, the company, which is due to report full 2023 results on March 14, said.
"This can largely be attributed to lower freight rates resulting from the normalisation of global supply chains," Hapag-Lloyd said.
($1 = 0.9231 euros)
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Written By: Reuters
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