By Vera Eckert
FRANKFURT (Reuters) -Container shipping firm Hapag-Lloyd on Thursday reported a 3.1% 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 U.S. 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 euros (savings programme) is realistic to (be achieved) by the end of next year,” he added.
Houthi militant 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 euros and 1.1 billion euros, compared with a previously expected range of breakeven to 1.5 billion euros.
Core profit was 24% lower at 619 million euros in the six months at the German company.
Its stock in a small free float was 7.2% down at 1100 GMT.
Net income in the first half fell 3.1% to 709 million euros ($829 million) while revenues were up 10% at 9.7 billion euros and transport volumes grew 10.6% 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.
($1 = 0.8549 euros)
(Reporting by Vera Eckert, Editing by Ludwig Burger, Bernadette Baum and Chizu Nomiyama )
