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Hapag-Lloyd AG reported strong first-quarter results for 2025, with significant growth in transport volume and profitability despite ongoing challenges in global shipping markets. The German container shipping giant presented its Q1 2025 results on May 14, highlighting a 45% jump in group profit amid continued Red Sea disruptions and US-China trade tensions.
Quarterly Performance Highlights
Hapag-Lloyd delivered robust financial performance in the first quarter of 2025, with transport volume increasing by 9% to 3.3 million TEU (twenty-foot equivalent units), compared to 3.0 million TEU in Q1 2024. This volume growth helped drive a 15% increase in revenue to $5.3 billion, up from $4.6 billion in the same period last year.
The company’s profitability metrics showed even stronger improvement, with EBITDA rising 17% to $1.1 billion and group profit surging 45% to $0.5 billion compared to Q1 2024. Free cash flow more than doubled to $0.6 billion, though net liquidity decreased to $1.0 billion from $2.6 billion a year earlier.
As shown in the following comprehensive overview of key financial metrics:
The company’s quarterly earnings have continued to decline from the peak levels achieved in Q3 2024 as freight rates normalize, but still show significant year-over-year improvement:
Market Context and Trade Developments
Global container volumes increased by 4.2% in Q1 2025, reaching 44.9 million TEU. The transpacific route remained one of the strongest trades, partly driven by front-loading effects ahead of expected US tariff increases. However, spot freight rates fell sharply during the quarter before stabilizing in April.
The company noted that China-US bookings dropped significantly in April due to the introduction of high tariffs, though transportation demand from other Far East countries to the US partially compensated for this decline. US-related volumes represent a significant portion of Hapag-Lloyd’s business, with US volumes accounting for 27% of the company’s total container volumes in 2024.
The following chart illustrates the global container volume trends and freight rate development:
Hapag-Lloyd has prioritized providing reliable weekly services to customers while adjusting capacity by deploying smaller vessels on China-US routes. The company provided this breakdown of its US-related volumes:
The ongoing rerouting of vessels around the Cape of Good Hope continues to absorb capacity, with the timing of the Red Sea passage reopening remaining uncertain. This situation has contributed to higher unit costs, which reached $1,317/TEU in Q1 2025, up from $1,256/TEU in Q1 2024.
Operational Developments
A major highlight of the quarter was the successful launch of the Gemini network, a partnership with Maersk that began operations in February 2025. According to the presentation, approximately 95% of vessels have been phased in, all mainline and shuttle services have started, and there have been around 3,250 port calls since February 1.
Most notably, the Gemini network has achieved approximately 90% schedule reliability, significantly outperforming competitors who range between 50-75% reliability. This operational excellence is illustrated in the following slide:
The company’s business segments showed divergent performance. The Liner Shipping segment, which represents the bulk of operations, saw revenue increase to $5.22 billion in Q1 2025 from $4.53 billion in Q1 2024, with an EBIT margin improvement to 9.0% from 8.4%. Meanwhile, the Terminal & Infrastructure segment maintained relatively stable performance with revenue of $109 million and an EBIT margin of 13.4%, down slightly from 15.1% in Q1 2024.
Strategic Initiatives
Hapag-Lloyd outlined a comprehensive cost program aimed at maintaining long-term competitiveness in response to broad-based inflation that has led to permanent increases in main cost components. The program focuses on three key profitability levers: pricing strategy review, fleet productivity enhancement, and SG&A improvements through accelerated digital transformation.
The company has set an ambitious target to remove over $1 billion in costs over the next 18 months, with the goal of reducing unit costs from approximately $1,315/TEU in Q1 2025 to around $1,100/TEU by 2030.
In its Terminal & Infrastructure business, Hapag-Lloyd expanded operations by inaugurating a new facility in India and acquiring a terminal in Le Havre, France. This expansion aligns with the company’s strategy to diversify revenue streams beyond container shipping.
The company’s financial position remains strong, with an equity ratio of 62.1% and a liquidity reserve of $8.7 billion as of March 31, 2025. Hapag-Lloyd distributed a dividend of €8.20 per share on May 6, 2025, totaling €1.4 billion.
Forward-Looking Statements
For the full year 2025, Hapag-Lloyd expects transport volume to increase "clearly" while freight rates are projected to decrease "clearly." The company forecasts group EBITDA to reach between $2.5 billion and $4.0 billion, with group EBIT expected between $0.0 billion and $1.5 billion.
The outlook remains clouded by significant uncertainties, including the potential impact of US tariff policies and the ongoing Red Sea situation. Container volume growth is assumed to be around 6% in 2025, while fleet capacity growth is expected to be flat.
Looking beyond 2025, Hapag-Lloyd outlined five key priorities: ensuring seamless phase-in of the Gemini network to achieve 90% schedule reliability; maintaining high customer satisfaction through operational excellence; continuing terminal division expansion; investing in team expertise and resilience; and adapting to new market environments with a competitive cost structure.
The company’s stock closed at €147.70 on May 13, 2025, up 0.82% for the day, according to available market data. The shares have traded between €108.30 and €190.50 over the past 52 weeks.
Full presentation:
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