Following the slump in profits in 2023, German container shipping company Hapag-Lloyd expects earnings to decline again in 2024.
"We have made a satisfactory start to the current financial year, but the economic and political environment remains volatile and challenging - especially in view of the current situation around the Red Sea," the Hamburg-based company said on Thursday when presenting its annual report for the previous year. "We therefore anticipate an overall decline in earnings for 2024."
The executive board therefore expects earnings before interest and taxes (EBIT) to be in a range of a loss of €1.1 billion ($1.2 billion) to a gain of €1.1 billion. By comparison, EBIT in 2023 was €2.5 billion, compared to €17.5 billion in 2022, which was a record for the company.
Major shipping companies including Hapag-Lloyd are increasingly avoiding the shortest sea route between Asia and Europe through the Red Sea amid attacks by Yemen's Houthi rebels on commercial vessels and sailing around South Africa's Cape of Good Hope instead.
The Houthis say they want to force an end to the Israeli attacks in the Gaza Strip, which followed the unprecedented massacre by the Palestinian Islamist organization Hamas in Israel on October 7. However, many of the ships that have come under fire have no connection to Israel.
Meanwhile, the supervisory board of Hapag-Lloyd extended the contract of chief executive Rolf Habben Jansen ahead of schedule. Instead of running until 2027, the contract now runs until the end of March 2029.
"Rolf Habben Jansen has done an excellent job for Hapag-Lloyd for almost a decade," said the chairman of the supervisory board, Habben Jansen's predecessor Michael Behrendt. "He has continuously developed the company strategically, significantly internationalised it and kept it safely on course for growth despite occasional rough seas."