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Hapag Lloyd Still Steaming Full Steam Ahead

Hapag Lloyd Still Steaming Full Steam Ahead

Hapag Lloyd said nine-month net profit more than doubled thanks to higher freight rates and the company also stuck with its full-year guidance despite what it said was a more muted market.

Disruptions to global supply chains, originally caused by the coronavirus pandemic, have resulted in longer turnaround times for ships and containers, pushing up rates but by the end of the third quarter, weaker demand for container transport had become noticeable, chief executive Rolf Habben Jansen said in a statement.

“This is evident, for example, in falling spot rates and rising inflation-related unit costs”.

Mr Jansen also noted that there has been a slight easing in the shortage of available shipping capacity which should help global supply chains normalise.

Net profit came to EUR13.8 billion (US$13.8 billion) for the first nine months of 2022, up from EUR5.6 billion in the year-earlier period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) jumped 129 percent to EUR15.6 billion during the nine-month period and is expected to come in between EUR18.2 billion and EUR20.1 billion for the full year.

The world’s number five container shipping firm said it had benefitted from average freight rates of US$2,938 per TEU, up 62 per cent from a year earlier.

But an average 67 per cent rise in shipping fuel prices to $755 has resulted in higher expenses, it added.

The outlook for container shipping, a bellwether of global economic trends, has deteriorated as economies around the world grapple with sharply spiking inflation and cost-of-living crises in the wake of Russia’s invasion of Ukraine.

“Our strong balance sheet will help us to stay on course even in difficult waters,” Mr Jansen said, adding the company would continue to focus on investments in port terminal infrastructure.

Bigger rival Maersk warned of slowing demand for the transport and logistics sectors last week and cut its forecast for container demand this year, although it beat third-quarter earnings expectations.

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