German container shipping firm Hapag-Lloyd on Thursday posted a 50% drop in nine-month net profit to 846 million euros ($986.6 million) and lowered the top end of its full-year earnings outlook, citing market volatility and rising costs.

The company narrowed its full-year earnings before interest and taxes (EBIT) forecast to between 0.5 billion and 1.0 billion euros, reducing the upper end from a previous range of 0.2 billion to 1.1 billion euros announced in its August earnings.

"(We) will respond agilely to changes in global trade and maintain strict cost discipline," Chief Executive Rolf Habben Jansen said in a statement.

He also added that the company was seeing the first cost advantages from the new Gemini cooperation with rival Maersk MAERSKb.CO, despite earlier investments.

Security concerns in the Red Sea and frequent shifts in U.S. trade policy have contributed to unstable demand and fluctuating freight rates, weighing on profitability across the shipping sector, a key indicator of global economic activity.

Hapag-Lloyd's nine-month EBIT declined 55% year-on-year to 809 million euros, as it dealt with rising costs which could not be offset by a 9% increase in transport volumes to 10.2 million twenty-foot equivalent units (TEU) in the period.

Average freight rates were down by 4.8% at $1,397 per TEU.

Maersk on November 6 reported better-than-expected third-quarter results but warned of falling freight rates in the fourth quarter.

($1 = 0.8575 euros)

https://www.marinelink.com/news/hapaglloyd-records-profit-drop-lowers-532390