Hapag-Lloyd seeks savings after lowering 2025 earnings forecast

Container shipping firm Hapag-Lloyd on Thursday reported a 3.1 per cent decline in first-half net income and lowered the top end of its full-year earnings forecast, which has prompted it to focus on cost savings over the next 12-18 months.

CEO Rolf Habben Jansen told analysts that start-up spending on its Gemini cooperation with competitor Maersk, fidgety customers amid changing US trade policies, and virtual closure of the Suez Canal weighed on profits.

"The Gemini transition cost was a three-million dollar digit figure," said Habben Jansen in a call with analysts, adding port congestions amid tariff to and fro, as well as costly alternatives to the Suez route had also led to spiralling costs.

"A €1 billion (savings programme) is realistic to (be achieved) by the end of next year," he added.

Houthi terrorist attacks on vessel owners in the Middle East forced shippers to avoid the region.

Germany's Hapag-Lloyd, the world's fifth-largest shipping firm, earlier projected full-year earnings before interest and taxes ranging between €200 million and €1.1 billion, compared with a previously expected range of breakeven to €1.5 billion. Core profit was 24 per cent lower at €619 million in the six months at the German company.

Its stock in a small free float was 7.2 per cent down at 11:00 GMT. Net income in the first half fell 3.1 per cent to €709 million ($829 million) while revenues were up 10 per cent at €9.7 billion and transport volumes grew 10.6 per cent to 6.7 million 20-foot-equivalent (TEU) containers.

Gemini brings synergies from a network of 340 ships on seven trade corridors, which will begin to pay off from the second half of 2025, Habben Jansen said.

But inflation, higher prices of shipyards, carbon permits and "cleaner fuels" could not be argued away.

(Reporting by Vera Eckert, Editing by Ludwig Burger, Bernadette Baum and Chizu Nomiyama )