German container shipper Hapag-Lloyd has posted a net profit of €3.2 billion for the first nine months of 2023, down by 77% from a year earlier, and cut its forecasts for full-year earnings.
Net profit was down from €13.8 billion in comparable 2022 when the shipping industry, a proxy for global trade, boomed amid post-pandemic recovery and because logistics disruptions drove up prices for consumers.
'Significantly Lower'
'Results are significantly below the prior-year level due to the severe change in market conditions,' said Hapag-Lloyd, the world's fifth-biggest container liner, in a press release.
This year, the global economic slowdown and the clearing of port logjams sent freight rates down sharply, which has also harmed Hapag-Lloyd competitor Maersk.
Hapag-Lloyd said its 2023 earnings before interest and taxes (EBIT) were now seen to be ranging between €2.2 billion to €3.1 billion, down from a €2 billion to €4 billion range quoted before.
EBITDA was expected to be in a range of €4.1 billion to €5 billion vis-a-vis a previous range of €4 billion to €6 billion.
Transport volumes, however, remained almost at par with those in the prior year at 8.9 million twenty-foot equivalent units (TEU), up nearly 5% year-on-year in the third quarter.
Read More: Shipping Firm Maersk Sees Full-Year Profits At Lower End Of Range
Fuel Prices Lower
Relief also came from lower shipping fuel prices, which dropped by 19% to an average $611 per tonne in the nine months.
Freight rates were off 45% in the nine months at $1,604 per TEU, pressuring earnings.
"If spot rates do not recover, we could face some challenging quarters in this subdued market environment," commented chief executive Rolf Habben Jansen.
