German container shipping company Hapag-Lloyd has today reported a 3.1% decline in first-half net income and lowered the top end of its full-year earnings forecast, largely due touncertainty over geopolitical issues and US trade policy.
The world’s fifth-largest shipping firm projected full-year earnings before interest and taxes ranging between €200m and €1.1 billion, compared with a previously expected range of breakeven to €1.5 billion.
Frequent changes in US tariff policies have caused volatility in trade patterns, and the tense security situation in the Red Sea has also been a burden, resulting in 24% lower EBIT at €619m in the six months, the German company said.
Houthi militant attacks on Middle Eastern shipping have clouded the outlook for global shipping, with vessel owners being forced to sail a costly alternative route around Africa.
Net income in the first half fell 3.1% to €709m.
However, revenues were up 10% at €9.7 billion and transport volumes grew 10.6% to 6.7 million 20-foot-equivalent (TEU) containers, spurring CEO Rolf Habben Jansen to talk of a “solid note overall.”
The company’s operational collaboration with bigger rival Maersk – known as Gemini – got off to a good start, but costs needed to be optimised, he said.
Germini brings together a network of 340 ships on seven trade corridors.
