The blockade of the Strait of Hormuz is leaving a significant mark on the balance sheet of Hapag-Lloyd, Germany's largest container shipping line. In the first quarter, the group's earnings before interest and taxes (EBIT) slipped into the red. The company reported a loss of 134 million euros, compared to a profit of 463 million euros a year earlier, according to a statement released on Wednesday. Hapag-Lloyd attributed the slump to weather-related disruptions and lower freight rates. 'We cannot be satisfied with the course of the first quarter, as weather-related supply chain disruptions and pressure on freight rates led to a significant decline in earnings,' said CEO Rolf Habben Jansen.

The average freight rate stood at 1,330 US dollars per standard container (TEU), down from 1,471 dollars in the prior-year quarter. Revenue fell by nearly 17 percent to 4.2 billion euros. For the full year, the Hamburg-based group does not rule out a significant operating loss. On Wednesday, Hapag-Lloyd confirmed that EBIT is expected to range between minus 1.3 and plus 0.4 billion euros. However, the group emphasized that the forecast remains subject to considerable uncertainty due to highly volatile freight rate developments and the conflict in the Middle East.

Like virtually all major container shipping lines, Hapag-Lloyd is struggling with maritime blockades in the Middle East. The Suez Canal has long been avoided due to the threat of attacks by Yemeni Houthi rebels. Following the escalation of tensions involving Iran in late February, the blockade of the Strait of Hormuz added further complications. Shipping companies are rerouting vessels on lengthy detours, which is driving up costs. The Danish shipping giant Maersk, with which the Hamburg firm cooperates on certain routes, also suffered a collapse in profits during the first quarter.

(Report by Elke Ahlswede. Edited by Hans Busemann. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)