Hapag-Lloyd Aktiengesellschaft (ETR:HLAG) said its financial and operational performance improved substantially in the second quarter after what Chief Executive Officer Rolf Habben Jansen described as an “unsatisfactory” first quarter, supported by stronger transport volumes, higher freight rates and resilient demand on major trade lanes.
Group revenue rose 19% sequentially to $5.8 billion in the second quarter, while EBITDA increased 68% from the first quarter to $829 million. The EBITDA margin improved to 14.2% from 10% in the first quarter. The company reported group EBIT of $176 million and group profit of $83 million, reversing an EBIT loss of $157 million in the first quarter.
Liner business returns to profitability
Revenue in Hapag-Lloyd’s liner shipping segment increased to $5.7 billion in the second quarter from $4.8 billion in the first quarter. Liner EBITDA reached $773 million, while the segment reported EBIT of $153 million after recording an EBIT loss of $174 million in the prior quarter.
Transport volumes climbed nearly 9% sequentially to 3.5 million TEUs in the second quarter and were 3.5% above the prior-year quarter. The company said the strongest quarter-over-quarter volume improvement came on the Europe-to-America trade, which had been affected by severe weather and softer demand in the first quarter.
For the first half, transport volumes rose 1.5% to 6.7 million TEUs. The average freight rate for the first half was stable year over year at $1,406 per TEU, despite significant fluctuations during the period.
In the second quarter, the average freight rate rose 11% sequentially and 9% year over year to $1,475 per TEU. Habben Jansen said rate increases occurred late in the quarter, meaning that most of their impact would be seen in the third quarter.
Middle East disruption adds costs
The company said conflict in the Middle East created significant operational disruption and about $600 million in additional cash costs. Frese said approximately $400 million of that amount was recognized as an expense during the second quarter, while the remainder related to bunker inventory buildup.
Unit costs rose 2% sequentially and 7% from the prior-year period to $1,443 per TEU. Hapag-Lloyd attributed the increase to higher fuel costs, alternative routing expenses, storage and inland transport costs, insurance, and time-charter expenses tied to the regional disruption.
The average bunker consumption price increased to $700 per metric ton in the second quarter from $485 per metric ton in the first quarter. The company said emergency surcharges and its regular fuel recovery mechanisms helped mitigate the impact. Excluding higher bunker prices and direct effects of the Middle East disruptions, Frese said underlying unit costs improved both sequentially and year over year.
Habben Jansen said the company had moved vessels it wanted to remove from the Strait of Hormuz and was offering customers alternative routings, including land bridges. He said those alternatives were more expensive and had less capacity than previous routes.
Regarding a possible return through Bab el-Mandeb and the Suez Canal, Habben Jansen said conditions had improved from a year or 18 months earlier but that any return would occur gradually rather than all at once. He said the direct trip-cost savings from returning to Suez would not be significant because lower fuel consumption would be offset by Suez Canal fees.
Terminal operations expand
Hapag-Lloyd’s terminals and infrastructure business continued to grow, with throughput reaching 3.6 million TEUs in the second quarter and 7 million TEUs in the first half. First-half segment revenue increased nearly 50% to $360 million, while EBITDA reached $102 million and EBIT totaled $39 million.
The company said results benefited from the full consolidation of JM Baxi’s container terminal business and strong throughput growth in India and Latin America. Hapag-Lloyd increased its stake in JM Baxi to 51%, allowing it to consolidate the business at the end of the first quarter.
The company also began operations at its terminal in Damietta, Egypt, and signed a contract related to Aracruz or Imatra, where operations are expected to begin in 2028. More recently, it signed a term sheet with Eurogate to acquire a 20% stake in Eurogate Container Terminal Hamburg and increase its stake in the TC3 container terminal from 10% to 20%.
Frese said operational challenges at key European hubs, continuing cost pressure and the ramp-up of new terminals weighed on the segment’s profitability.
Outlook and ZIM transaction
Hapag-Lloyd raised its earnings outlook in July, citing higher demand and stronger spot freight rates. Habben Jansen said management remained comfortable with the updated outlook, while acknowledging continuing market uncertainty.
The CEO said demand growth on dominant trade lanes was about 7% in the first half, following about 6% growth in 2025. He said the company saw no significant slowdown in bookings and expected robust demand to continue, although visibility beyond 12 to 18 months remained difficult.
Habben Jansen also pointed to persistent port congestion, saying demand growth had exceeded capacity growth over the past several years and that infrastructure expansion would take time. He said congestion at ports including Shanghai was not expected to ease soon.
Hapag-Lloyd continued to pursue its proposed acquisition of ZIM, whose shareholders have approved the transaction. The company is now working through regulatory approvals and still expects to close the deal toward the end of 2026, Habben Jansen said.
At the end of June, Hapag-Lloyd had $3.2 billion in cash and a total liquidity reserve of $5.9 billion, including fixed-income investments and undrawn revolving credit facilities. Equity stood at $20.7 billion, representing an equity ratio of about 61%, while net debt increased to nearly $2 billion from $1.2 billion at the end of 2025, largely reflecting dividend payments and temporary working-capital effects.
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.
