Hapag-Lloyd Aktiengesellschaft Q3 Earnings Call Highlights

Key Points

• Hapag-Lloyd raised its 2026 outlook, forecasting EBITDA of $4.6 billion to $5 billion and EBIT of $2 billion to $2.4 billion, citing sustained demand and stronger-than-expected freight rates.
• Third-quarter revenue rose 26% to $6.9 billion and EBITDA nearly doubled to $1.7 billion. The average liner freight rate climbed 28% year over year to $1,808 per TEU, while transport volumes remained broadly stable.
• The company expects to bring services back to the Suez route close to normal by the end of Q1 2027, freeing a little more than 10 ships. It also aims to close its proposed ZIM acquisition in Q1 2027, subject to outstanding approvals.

Hapag-Lloyd Aktiengesellschaft ETR: HLAG raised its 2026 earnings outlook after higher freight rates and strong vessel utilization helped lift third-quarter profit, even as congestion and the Middle East conflict added costs.

The container shipping company now expects full-year earnings before interest, taxes, depreciation and amortization, or EBITDA, of $4.6 billion to $5 billion and earnings before interest and taxes, or EBIT, of $2 billion to $2.4 billion. CEO Rolf Habben Jansen attributed the revised forecast to sustained demand and stronger-than-expected freight rates.

“Peak season even until today, is in a way still there,” Habben Jansen said, adding that a restocking cycle appeared to be taking longer than anticipated.

Higher Rates Drive Third-Quarter Earnings

Third-quarter group revenue rose 26% from a year earlier to $6.9 billion, while EBITDA nearly doubled to $1.7 billion, CFO Mark Frese said. Group EBIT increased to $1.1 billion from $228 million, and group profit reached $1 billion.

Despite the third-quarter improvement, profit for the first nine months remained below the prior-year level, reflecting a weaker interest result and higher tax expenses. Frese said the company expected full-year group profit to finish clearly above the prior-year level.

In liner shipping, third-quarter revenue increased 25% to $6.7 billion. The average freight rate rose 28% year over year and 23% sequentially to $1,808 per twenty-foot equivalent unit, or TEU. Frese cited robust demand, particularly on the transpacific trade, constrained vessel capacity and higher fuel surcharges.

Transport volumes were broadly stable at 3.4 million TEU. Frese said capacity utilization on the dominant legs of East-West trades exceeded 98%. Habben Jansen said the company’s capacity was roughly unchanged from a year earlier, limiting its ability to match the volume growth of larger competitors.

The CEO also said Hapag-Lloyd’s relatively small transpacific presence and larger Atlantic exposure had weighed on its performance compared with some peers. Transpacific rates had risen sharply, while the Atlantic market had been soft, he said.

Suez Return and 2027 Capacity

Habben Jansen said the company was gradually returning services to the Suez route and expected operations to be close to normal by the end of the first quarter of 2027. A gradual return helps avoid sending too much cargo to European and Mediterranean ports at once, he said.

More than half of the relevant capacity had already returned via Suez, according to the CEO. Once the transition is complete, he expects it to free up a little more than 10 ships for deployment elsewhere, including a planned additional Gemini service to Europe.

Separately, Habben Jansen said Hapag-Lloyd expects about 5% more vessel capacity in 2027 from new ships, including time-chartered and owned vessels. He expects the company to grow at least in line with the market next year.

The CEO described the industry order book, at 44% of existing capacity, as substantial but said deliveries scheduled for 2027 were not excessive. He was cautiously optimistic that the market would remain fairly balanced next year, while warning that supply growth would likely outpace demand growth in 2028 and 2029. Scrapping and idling older vessels could help offset some of that pressure, he said.

ZIM Deal and Terminal Growth

Hapag-Lloyd expects to close its proposed ZIM acquisition in the first quarter of 2027, most likely in the second half of the quarter, subject to outstanding approvals. Habben Jansen said the process for approval to transfer the golden share to FIMI was halted in October and that the company planned to resubmit its application after addressing points raised by the Israeli government.

The CEO said he remained confident in the transaction and that closing it was the company’s “plan A.” If the deal does not proceed, Hapag-Lloyd would consider an alternative, he said.

The terminals and infrastructure segment increased third-quarter throughput 10% to 3.9 million TEU. Revenue rose 51% to $197 million, supported primarily by consolidation of the J M Baxi container terminal business and higher throughput, Frese said. Segment EBITDA was $56 million and EBIT was $34 million.

For the first nine months, Hapag-Lloyd generated $2.6 billion in operating cash flow and $2.5 billion in free cash flow. It ended September with $4.4 billion in cash and $1.7 billion in net debt.

Habben Jansen said congestion, the company’s Middle East land bridge and equipment stranded in the region were contributing to costs. Some pressure could ease if fuel prices and congestion normalize, he said, but higher labor, port and canal costs were unlikely to be fully reversed.

About Hapag-Lloyd Aktiengesellschaft (ETR:HLAG)

Hapag-Lloyd Aktiengesellschaft, together with its subsidiaries, operates as a liner shipping company worldwide. It operates through Liner Shipping; and Terminal & Infrastructure segments. The company's vessel and container fleets are used for dry and special cargo, dangerous goods, and coffee, as well as reefer cargo. It also offers bilateral EDI, a directly connected electronic data interchange; application programming interface (API) developer portal to connect software systems and exchange data; operates portals comprising INTTRA, Infor Nexus, and CargoSmart that manage customer's supply chain data and connect to their carriers through one interface, as well as WAVE BL service for the digital release of original bills of lading; and provides email and security information services.

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