Hapag-Lloyd reported a sharp decline in earnings for 2025, as falling freight rates and rising operational costs offset strong cargo volumes and improved network performance.

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The carrier posted a Group profit of €924 million ($1.0 billion), down significantly from €2.4 billion in 2024. EBITDA fell to €3.2 billion, while EBIT came in at €1.0 billion, reflecting mounting pressure on margins as market conditions normalized following previous highs.

Despite the earnings drop, operational performance remained robust. Hapag-Lloyd transported 13.5 million TEU during the year, marking an 8% increase that outpaced overall market growth. This was supported in part by its Gemini Cooperation with A.P. Moller–Maersk, which delivered approximately 90% schedule reliability—setting a new benchmark for the industry.

However, declining freight rates proved to be the dominant factor. Average rates fell 8% to $1,376 per TEU as additional capacity entered the market and trade imbalances persisted. At the same time, costs increased due to port congestion, tariff-related disruptions, security concerns in the Red Sea, and startup expenses linked to the Gemini network rollout.

These pressures led to notable margin compression, with EBITDA margin dropping to 17.1% from 24.3%, and EBIT margin declining to 5.1%. Reflecting the weaker financial performance, the company plans to propose a reduced dividend of €3.00 per share, down from €8.20 the previous year.

Looking ahead, the outlook remains uncertain. Hapag-Lloyd expects EBITDA for 2026 to range between €0.9 billion and €2.6 billion, with EBIT potentially turning negative. The company cited ongoing freight rate volatility and heightened geopolitical risks—particularly in the Middle East—as key challenges.

CEO Rolf Habben Jansen noted that the operating environment has become increasingly unpredictable, driven by slower market growth, expanding vessel capacity, and persistent geopolitical tensions. While the company aims to offset some of these pressures through efficiency gains from the Gemini network, risks remain elevated.

At the same time, Hapag-Lloyd continues to pursue its long-term growth strategy, including expanding its terminal portfolio and advancing its planned acquisition of ZIM Integrated Shipping Services. If completed, the deal could strengthen its competitive position and unlock significant cost synergies.

For now, the company faces a clear challenge: while volumes and operational performance are improving, profitability is under strain and with external risks intensifying, the year ahead is expected to remain difficult for the global shipping industry.