Hapag-Lloyd expects its earnings in 2023 to "gradually normalise" after the highs seen during the pandemic years and on the back of persisting war between Russia and Ukraine and the global economy continuing cool.

The ocean carrier made the forecast as it reported an EBITDA increase to US$ 20.5 billion and EBIT growth of US$18.5 billion — resulting in a Group profit of US$18 billion for 2022. 

 Source: Hapag-Lloyd

Freight rates decline at end of 2022

"Overall, we look back on a very successful 2022 with exceptionally strong results. This has enabled us to strengthen our financial resilience and asset structure once again," said Rolf Habben Jansen, CEO of Hapag-Lloyd AG, adding that the shipping line also invested in terminals and infrastructure as well as in the efficiency of its fleet.

"However, costs — such as for fuel, charter vessels and container handling — have risen significantly," he added.

For 2022, Hapag-Lloyd saw revenue of US$36.4 billion which it attributed mainly to an increase in the average freight rate to US$2,863/TEU compared to US$2,003/TEU in 2021.

It added that by the end of the year, however, the freight rate had already "significantly decreased" due to easing congestion in ports and lower demand.

For 2022, Hapag-Lloyd reported that transport volumes "remained on a par" with the prior-year level, at 11.8 million TEUs compared to the 11.9 million TEUs in 2021, due to the strained supply chains.

Moving forward, Hapag-Lloyd forecasts its revenue to cool in 2023 amid a downturn in the global economy.

Considerable uncertainty in 2023

"Looking ahead, Hapag-Lloyd expects earnings to gradually normalise in the current 2023 financial year," it said, adding that EBITDA is expected to be in the range of US$4.3 to US$6.5 billion; and EBIT to be in the range of US$2.1 to US$4.3 billion.

The ocean carrier noted, however, that this outlook remains subject to "considerable uncertainty" given the ongoing war in Ukraine and other geopolitical conflicts, as well as the impacts of high inflation.

“We have got the current financial year off to a decent start, but the economy has cooled, and a significant decrease in earnings remains inevitable. So we will continue to act flexibly in the market and keep a close eye on our costs," Rolf Habben Jansen said.

"In addition, we will be working very intensively on formulating the strategic course that we will pursue until 2030," he added, noting that quality and sustainability will continue to have the highest priority for Hapag-Lloyd.