Hapag-Lloyd aims for operational profitability despite volatile markets

The Hamburg shipping company Hapag-Lloyd is confident of exceeding its operational profit thresholds this year. After a solid first quarter, in which the shipping company particularly surprised with a healthy cost structure, the company is faced with the challenge of realizing the forecasted revenues amid fluctuating freight rates and global political tensions. Although Hapag-Lloyd had to accept a nearly 25 percent decrease in turnover to 4.3 billion euros and operating profit plummeted by 80 percent to 365 million euros, the company still surpassed analysts' forecasts. However, the profit attributable to shareholders fell more significantly, amounting to around 295 million euros. The entire freight industry benefited from global supply chain disruptions during the pandemic, which sent freight rates – the price for transportation by sea – soaring. Currently, however, the industry faces an oversupply of shipping capacities and a sluggish global economy. Nevertheless, the warlike actions of the Houthi militia in the Red Sea also led to a slight revival of freight rates. UBS analyst Cristian Nedelcu particularly highlighted the shipping company's improved cost development in the first quarter and indicated potential for increased profitability over the course of the year, depending on the development of freight prices.