Hapag-Lloyd reported a decline in transport volumes and lower freight rates in the first quarter of 2023 as global demand continued to weaken in the first three months of the year.

The global liner shipping company also ended the first quarter with an EBITDA of US$2.4 billion (EUR 2.2 billion) as EBIT decreased to US$1.9 billion (EUR 1.7 billion) compared to the same quarter last year.

Transport volumes were 4.9% lower than in the first quarter of last year, at 2,842 TTEU (Q1 2022: 2,987 TTEU), owing to local destocking and weaker overall global demand.

Hapag-Lloyd noted that lower freight rates drove profits down in Q1.

"The lower average freight rate of US$1,999/TEU (Q1 2022: 2,774 US$/TEU) was particularly responsible for the decline in revenue, which decreased to US$6 billion (EUR 5.6 billion)," its statement said.

Hapag-Lloyd reported that transport expenses remained at the prior-year level of US$3.3 billion.

It added that the lower transport volumes were accompanied by inflation-related cost increases and a higher bunker consumption price, of US$645/t (Q1 2022: US$613/t).

"Despite declining results, we have made a robust start to the current financial year," said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.

"The market environment has normalised, with corresponding declines in demand and freight rates. This will undoubtedly have an impact on our earnings over the course of the year, so we will be keeping a very close eye on our costs. In addition, we are pressing ahead on further developing our Group’s ‘Strategy 2030’, which will focus on quality and sustainability," he added.

Meanwhile, Hapag-Lloyd reported that for the January to March period, the Group profit was also below the prior-year level, at US$2 billion (EUR 1.9 billion).

For the full year 2023, Hapag-Lloyd confirmed the forecast it published on March 2 — with EBITDA expected to be in the range of US$4.3 billion to US$6.5 billion (EUR 4 billion to 6 billion) and EBIT to be in the range of US$2.1 billion to US$4.3 billion (EUR 2 billion to 4 billion).

"However, the ongoing war in Ukraine, other geopolitical uncertainties and persistent inflationary pressures are creating risks that could negatively impact the forecast," Hapag-Lloyd said.