Hapag-Lloyd warns on earnings, slashes dividend

14th Mar 2024 10:47

(Sharecast News) - Container giant Hapag-Lloyd on Thursday reported a slump in annual profits and cut its dividend as it warned of lower earnings this year due to attacks on commercial shipping in the Red Sea.

Net profit fell 83% to €3bn while the shareholder payout was slashed by 85%. Global shipping markets have stabilised after the supply-chain disruption caused by the Covid-19 pandemic.

However, market volatility remains as Yemen-based Houthi militants began attacking ships in response to Israel's attack on Gaza, forcing companies to take longer and costlier routes to avoid the Suez Canal area.

"We ... expect to see an overall decrease in earnings in 2024," said chief executive Rolf Habben Jansen.

The dividend was cut to €9.25 a share from €63.

Hapag-Lloyd forecast 2024 core earnings of €1bn - €3bn, compared with the €4.4bn recorded in 2023. It also warned that forecasts were subject to considerable uncertainty given the volatile development of freight rates and geopolitical challenges.

Reporting by Frank Prenesti for Sharecast.com