Hapag’s Earnings Outlook Sets Tone for Down Year in 2025

Hapag-Lloyd reporting what it called “solid results” for 2024, outlined what it sees as another challenging year ahead. It became the latest of the major carriers to highlight the uncertainties and predict that the industry would continue to experience declines in profitability in the year ahead.

“We anticipate earnings in 2025 to be lower than in 2024,” CEO Rolf Habben Jansen told investors. “The economic and geopolitical environment remains fragile.” He highlighted a long list of challenges to the industry including an expectation that the outlook for U.S. economic growth is now reduced. Hapag was the first of the major carriers to discuss its outlook after Trump’s tariffs and trade war began.

Outlining the results for 2024, Jansen said they had been confronted with “a challenging market environment.” Container volumes however were up 4.7 percent to 12.5 million TEU while he said that freight rates overall remained stable for the year. As a result, Hapag reported revenues increased to just over $20 billion.

The carrier said that earnings increased slightly on an EBITDA basis to $5 billion, but the bottom line profitability was down versus 2024 to $2.6 billion. It sighted lower interest income, higher tax expenses, and higher transportation costs as it rerouted ships around the Cape of Good Hope. While the company remained strongly profitable, the board however is proposing a greater than 11 percent cut in its annual dividend reflecting the lower profitability.

Hapag’s results were largely in keeping with the other major carriers. Analysts at Sea-Intelligence yesterday forecast the sector would have total profitability on an EBIT basis of around $60 billion in 2024. That represents a significant decline from the peak of nearly $200 billion each in 2021 and 2022 according to the report.

“The 2024 level of profitability is still significantly higher than the pre-Covid years,” noted Alan Murphy, CEO of Sea-Intelligence. “In fact, the EBIT recorded in 2024-FY is higher than the combined EBIT of 2019, 2020, and 2023.”

Hapag pointed to its efforts to consolidate and expand its terminal business in 2024 and its efforts to further improve processes which it said would yield results in the future. While saying it would keep “a very close eye” on unit costs while focusing on increasing efficiency, Jansen pointed to the implementation of the Gemini network with Maersk and continued efforts to develop its terminal business in 2025.

Noting the “considerable uncertainty,” Hapag forecasted that earnings on an EBITDA basis would decline to a range between $2.5 to $4.0 billion. On an EBIT basis, Hapag predicts it will be between breakeven and $1.5 billion in 2025

Despite the forecasts for 2025, Hapag continues to have a longer-term positive outlook. Jansen highlighted that it has 24 new ships ordered and financed to be built in China. He noted it was the largest newbuilding program in the history of the company. With approximately 300 containerships and a capacity of 3.7 million TEU, Hapag-Lloyd also is operating the largest fleet in the history of the company.