Hapag-Lloyd Aktiengesellschaft (ETR:HLAG) management told analysts its 2025 performance reflected resilience in a volatile container shipping market, highlighted by above-market volume growth, improving schedule reliability under the Gemini Cooperation, and continued investment in fleet modernization and terminals. Executives also addressed renewed disruption in the Middle East, which has driven sharp weekly cost increases and complicated near-term visibility.
2025 highlights: volume growth, Gemini transition, and terminal expansion
CEO Rolf Habben Jansen described 2025 results as “solid,” pointing to strong growth “significantly ahead of market” and an ability to keep rates at “a reasonable level,” despite transition costs tied to moving into the Gemini Cooperation. He said Hapag-Lloyd began to see costs come out in the second half of the year after those transition expenses.
On the operational side, Habben Jansen said the Gemini network reached the targeted 90% schedule reliability “pretty much from day one” alongside partner Maersk, despite earlier skepticism from the market. He noted February reliability dipped due to “very bad weather in Europe,” but management expected to return to 90% within “one or two months.” He added that customer feedback and net promoter scores indicated Gemini outperformed other alliances and argued improved reliability could allow customers to reduce inventory.
Hapag-Lloyd also highlighted expansion in its terminal portfolio. Habben Jansen said the Le Havre terminal began operations in March and is being used by Gemini, improving the company’s position in and out of France. He said Damietta went live in February with a “really good start” and strong productivity, while a terminal project in Veracruz (agreement signed in December) is expected to complete construction “somewhere in the course of 2028.” He also referenced an agreement signed in Brazil toward the end of the year.
Financial results: earnings down year over year, cash generation remained strong
CFO Mark Frese said 2025 was marked by a “very challenging market environment,” but the company delivered “a very satisfactory financial result,” with positive free cash flow and a strong balance sheet.
- Revenue increased 2% in 2025, mainly driven by higher transported volumes.
- Group EBITDA was $3.6 billion and EBIT was $1.1 billion.
- Group profit was $1.0 billion.
Frese said results landed at the upper end of earnings guidance and were “slightly supported” by a roughly $150 million positive operational cost one-time non-cash effect in the fourth quarter. He attributed that to an improvement in system-supported revenue recognition processes and a related release of provisions.
In liner shipping, Hapag-Lloyd transported 13.5 million TEU (referred to on the call as TUs), up 8% year over year. Frese said the company saw softer freight rates due to rising trade imbalances and increasing global tonnage supply, while costs were pressured by new U.S. tariff policies, security tensions in the Red Sea, and increasing port congestion. Despite that, the liner segment delivered EBIT of $1.0 billion.
Frese provided additional detail on pricing and cost trends. He said the average freight rate was $1,376 per TU for the full year, down 8% year over year, and ended the year at $1,310 per TU in the fourth quarter, which he said was the lowest level since the fourth quarter of 2023. Unit costs increased 4% to $1,328 per TU, driven by factors including trade imbalances, fluctuating U.S. tariffs, regulatory compliance requirements, a weaker U.S. dollar, Red Sea rerouting, and persistent port congestion.
Terminals & infrastructure: throughput growth and acquisition-driven revenue gains
The terminals and infrastructure segment delivered “strong throughput growth,” Frese said, benefiting from synergies with liner shipping and the ramp-up of new terminals. Segment revenues rose 18% to $514 million, with particular strength in European and Mediterranean hubs supported by Gemini connectivity. Frese cited the Le Havre terminal acquisition and the ramp-up of Tuticorin in India as contributors.
However, he said the cost base was impacted by Latin America terminal demand volatility linked to U.S. tariffs, unfavorable mix effects, one-offs, and ramp-up costs. As a result, segment EBITDA remained broadly stable at $152 million, while EBIT declined slightly to $66 million.
Cash flow, liquidity, and dividend proposal
Frese said operating cash flow totaled $2.9 billion in 2025. The company invested around $1.8 billion, particularly in new vessels and containers and in fleet modernization. Net cash outflow from investing activities was $1.4 billion, supported by $390 million of proceeds from interest, dividends, and divestments. Overall, free cash flow was $1.45 billion.
Financing cash outflows were $3.1 billion, which included $1.65 billion of dividend payments, along with debt and lease repayments and interest. The year-end cash balance was $4.1 billion. Frese said the total liquidity reserve was $7.0 billion, including highly liquid fixed income investments and undrawn revolving credit facilities, which he said provides flexibility for strategic investments such as the planned ZIM acquisition and for navigating volatility.
The executive board and supervisory board plan to propose a dividend of EUR 3 per share at the annual general meeting in May. Frese said this represented a payout ratio of 57% of annual net profit and a total payout of $0.5 billion, in line with the company’s dividend policy. He also noted that since its 2015 IPO, Hapag-Lloyd has distributed more than EUR 21 billion in dividends.
Outlook and market conditions: Middle East disruption and wide guidance range
Habben Jansen said global container volume growth had been “surprisingly robust” over the past two years, estimating market growth of 6% in 2024 and 5% in 2025. He added that growth on “dominant legs” was higher—10% in 2024 and 8% in 2025—helping explain why perceived overcapacity may have been less severe than feared. Looking into 2026, he expected slower growth and said the impact of the Middle East conflict was difficult to assess.
Management described immediate operational actions in response to the Middle East crisis, including suspending transits through the Strait of Hormuz and the Red Sea and stopping bookings to and from the Upper Gulf “simply because we cannot move the boxes.” Habben Jansen said Hapag-Lloyd continues to offer Asia-to-Middle East connections in some cases with alternative routing.
He estimated the crisis is adding roughly $40 million to $50 million per week in costs, mainly related to bunker fuel, with insurance also “up significantly,” along with storage and inland transportation in some cases. The company has introduced contingency and emergency charges to recover costs, while acknowledging a timing delay before such charges fully flow through. Executives said the intent is not to collect fuel-related adjustments twice; rather, the company is seeking to pull forward recovery due to the steep cost increase and then charge less later when contractual fuel adjustment formulas catch up.
Habben Jansen said Hapag-Lloyd had about six ships “stuck in the Persian Gulf” with total capacity of about 25,000 TUs, and that ports inside the Gulf could not be called, while some other regional ports such as Salalah and Jeddah remained usable.
For 2026, management provided a wide earnings outlook, citing uncertainty from the Middle East situation and earlier disruptions from extreme bad weather in Europe. The company guided to group EBITDA of $1.1 billion to $3.1 billion and EBIT of negative $1.5 billion to positive $1.5 billion. Habben Jansen said the scenario of the Red Sea remaining largely closed for 2026 was “the most realistic” at present. He also warned of a “challenging start” to 2026 due to disruptions in January across North and South Europe and said a soft first quarter was expected, with one analyst’s scenario of a heavily loss-making quarter described as “certainly not impossible.”
On contracting, Habben Jansen said the company experienced a “fairly normal contract season,” with most contracts closed before the Middle East conflict escalated. Contracted volumes were similar to last year, while rates were described as slightly down, with most contracts including fuel clauses that adjust with a delay. He said Hapag-Lloyd’s contract share remained around 50%.
Separately, Habben Jansen reiterated progress on the company’s cost savings efforts, saying it expects to reach full run-rate by the end of 2026 and that more than EUR 1 billion of savings are expected to materialize in 2026, although he noted the first quarter had been tough due to bad weather and the Middle East disruption.
The CEO also reiterated the company’s timeline for the planned ZIM transaction: a merger agreement signed in February, a ZIM extraordinary shareholders meeting scheduled for the end of April, and a goal to obtain regulatory clearances before year-end, with closing targeted for late 2026 or early 2027. He said the deal rationale includes strengthening market position, gaining access to a modern fleet and customer base, and targeting up to EUR 500 million of synergies per year.
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.
