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Hapag-Lloyd AG earnings drop in 2023: German shipping giant Hapag-Lloyd AG reported a 82.2% y-o-y decline in net income to USD 3.2 bn in 2023 while revenues fell 46.7% y-o-y to USD 19.4 bn by our own math, according to a statement released last week. The company attributed the fall in revenues to a reduction in average freight rates to USD 1.5k per TEU. Despite the decline in income when compared with 2022, the company achieved its third-highest bottomline in its history, CEO Rolf Habben Jansen said. Earnings in 2024 are forecasted to see an overall drop, amid ongoing tensions in the Red Sea, Jansen added.
The company is looking to slash costs, as overcapacity in the shipping sector and the ongoing crisis in the Red Sea pile up pressures on the outfit, Reuters reports. “We need to further reduce our per-unit costs in order to remain profitable and competitive, going forward,” Jansen said. On Tuesday, German ship owners’ group VDR revealed that diversions due to the Red Sea crisis are costing operators some USD 1 mn per tour.
Ukraine will not be renewing its five-year long gas transit agreement with Russia’s Gazprom and plans to explore alternative routes and LNG shipments, Reuters reported on Sunday. The agreement — which is set to expire in December 2024 — was signed between Moscow and Kyiv to export gas to Europe via Ukraine’s pipeline network. Moscow has indicated that if Ukraine does not extend the agreement it will turn to alternative routes and rely on sea-borne liquefied natural gas shipments.
Chinese imports of Russian crude are set to hit an all-time high this month,with Sokol oil intakes predicted to increase threefold m-o-m to 379k barrels a day, Bloomberg reports. The surge comes as India spurns Sokol due to US sanctions. Since Moscow’s invasion of Ukraine, China has remained a steady purchaser of Russian crude and has recently capitalized on the opportunity to acquire cheaper Sokol after shipments to India decreased. It is not clear if the oil shipments will go to actual buyers or end up in bonded storage, as Chinese banks are hesitant to be involved in the trade of Russian crude due to US sanctions on tankers, traders said.
Sanctions are putting the squeeze on Russian oil:US sanctions are making it more difficult for Russian state-owned tanker operator Sovcomflot to deliver its oil shipments, Bloomberg reports. The US Treasury issued a designation last month targeting Sovcomflot and identified 14 crude oil tankers as property in which the company has interest. “New sanctions are creating additional operational difficulties for doing business,” Sovcomflot said in a statement. “The company is working to overcome current challenges and continues to operate the fleet as usual.” The majority of tankers subject to individual sanctions since October have either significantly curbed their trading activities or have encountered significant disruptions. Asia receives the lion’s share of Russian crude exports, with Asian traders stating that sanctions are making it costlier and more expensive to source tankers for shipments.
