“We anticipate earnings in 2025 to be lower than in 2024,” CEO Rolf Habben Jansen told investors. He emphasized that the economic and geopolitical environment remains fragile, citing reduced expectations for U.S. economic growth. Hapag-Lloyd was one of the first major carriers to discuss its outlook following the onset of Trump’s tariffs and the ongoing trade war.

2024 Performance Highlights

In detailing the results for 2024, Jansen acknowledged a “challenging market environment.” However, container volumes increased by 4.7% to 12.5 million TEUs, and freight rates remained stable throughout the year, leading to revenues surpassing $20 billion.

Earnings increased slightly on an EBITDA basis to $5 billion, but bottom-line profitability decreased compared to the previous year, totaling $2.6 billion. Factors contributing to this decline included lower interest income, higher tax expenses, and increased transportation costs due to rerouting ships around the Cape of Good Hope. In response to the reduced profitability, the board has proposed an over 11% cut in its annual dividend.

Industry Context

Hapag-Lloyd’s results align with trends observed among other major carriers. Analysts at Sea-Intelligence forecast that the shipping sector will achieve total profitability on an EBIT basis of around $60 billion in 2024, significantly down from the nearly $200 billion peak observed in 2021 and 2022. Alan Murphy, CEO of Sea-Intelligence, noted that while profitability levels are lower, they still exceed those from the pre-COVID years, with 2024’s EBIT surpassing the combined EBIT of 2019, 2020, and 2023.

Future Outlook

Hapag-Lloyd is focusing on consolidating and expanding its terminal business in 2024 while striving to improve operational processes, which it believes will yield positive results in the future. Jansen mentioned the implementation of the Gemini network with Maersk and ongoing efforts to enhance the terminal business in 2025, all while keeping a close eye on unit costs and increasing efficiency.

Despite the challenges projected for 2025, Hapag-Lloyd maintains a long-term positive outlook. The company has ordered 24 new ships, marking the largest newbuilding program in its history, financed to be built in China. Currently, Hapag-Lloyd operates approximately 300 containerships with a capacity of 3.7 million TEUs, representing the largest fleet in the company’s history.

Looking ahead, Hapag-Lloyd forecasts EBITDA earnings to decline to a range of $2.5 to $4.0 billion for 2025, with EBIT projected to be between breakeven and $1.5 billion. The company remains committed to navigating the uncertainties of the current market while positioning itself for future growth.