HLAGF - Hapag-Lloyd: Still At The Mercy Of The Downcycle
2024-03-20 18:40:51 ET
Summary
- Hapag-Lloyd Aktiengesellschaft has officially entered loss-making territory.
- Pressure looks set to ramp up on both sides of the P&L.
- Valuation-wise, investors still aren’t getting a lot of safety margin here.
As I cautioned previously might happen (see Hapag-Lloyd: Headed For Near-Term Losses ), Hapag-Lloyd Aktiengesellschaft ( HPGLY ) posted an operating loss for its latest quarter. Minor positives from non-freight revenues aside, most of the Q4 commentary was also rather pessimistic, particularly with regard to a still unfavorable supply/demand backdrop. Yes, Red Sea disruptions will probably drive a small near-term windfall in Q1, but as management pointed out in its guidance , industry conditions are so bad that spot rates will most likely trend down into the back half - even if disruptions extend a few months longer....
Hapag-Lloyd: Still At The Mercy Of The Downcycle