Hapag-Lloyd has increased its earnings guidance for this year due to rate support from the Red Sea reroutings despite a lower year-on-year performance in the first quarter.

In the first quarter of 2024, Hapag-Lloyd's revenues dropped to US$4.6 billion from US$6 billion during the same period in 2023, while group profits decreased to US$325 million from US$2.0 billion year-on-year.

The decline in earnings reflects an industry-wide trend in recent quarters due to the normalization of the container market following the disruption of the COVID-19 pandemic.

However, the first quarter of 2024 performance exceeded expectations.

For the first quarter, Hapag-Lloyd saw its liner shipping segment grow — with volumes increasing by 6.8% to 3 million TEU (Q1 2023: 2.8 million TEU).

The average freight rate was US$1,359/TEU, down from US$1,999/TEU recorded during the same first quarter period in 2023.

"Even though our results are significantly below the exceptionally strong figures from the previous year owing to the normalisation of supply chains, we are pleased to have got the new year off to a good start," said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.

"The rates stabilised in the first quarter due to the rerouting of ships around the Cape of Good Hope and higher demand for capacity. The numerous new ships that have and will be delivered across the industry in 2024 have been instrumental to keep the Supply Chains going without too much disruption," he added.

Jansen added: "Going forward, we must keep a close eye on our costs, and we will continue the implementation of our Strategy 2030 — with a main focus on our decarbonisation initiatives and our promise to be the undisputed number one for quality for our customers."

Hapag-Lloyd raises 2024 guidance

In view of the positive business performance in the first quarter of 2024, Hapag-Lloyd said its Executive Board has refined its forecast for the current financial year, which was published in March.

"The Group EBITDA is now expected to be in the range of US$ 2.2 to US$3.3 billion (€2 to €3 billion) and the Group EBIT to be in the range of US$0 to US$1.1 billion (€0 to €1 billion)," the statement said.

"It is still assumed that a large part of the projected result will be generated in the first half of the year. In view of the highly volatile development of freight rates and major geopolitical challenges, this forecast remains subject to a high degree of uncertainty," the shipping line, added.