Hapag-Lloyd is disappointed by freight rates in the peak season

Hapag-Lloyd container shipping company defies adverse environment in the third quarter 2013 and plans rate increases on several routes

Hamburg’s container shipping company Hapag-Lloyd has once again – like in the second quarter – generated a profit in the third quarter of the current financial year, primarily as a result of substantial cost reductions. Between July and September 2013, the group recorded a profit of EUR 16.6 million, despite freight rates that continued to deteriorate. The average freight rate in the third quarter was USD 1,476/TEU, which was well below the previous year’s figure of USD 1,647/TEU. In contrast, the transport volume increased by 8.6 per cent, from 1.28 to 1.39 million TEU. Revenue came to EUR 1.664 billion, a decline on the prior year’s quarter (EUR 1.765 billion), largely due to exchange rate effects. The group achieved an operating result of EUR 66.9 million and EBITDA of EUR 133.6 million in the third quarter.

“The freight rate developments in the third quarter, the peak season for the liner shipping industry, were very disappointing,” said Michael Behrendt, Chairman of the Executive Board of Hapag-Lloyd. “But as in the second quarter, we were able to offset the adverse impact that this had on earnings with additional cost reductions. As a result, we can report a group profit for the third quarter, in spite of the difficult market environment.”

There has been no let-up in the pressure on freight rates in the fourth quarter, which is seasonally weaker anyway. “The irrational behaviour in the industry, which once again caused rates to drop drastically in October, is totally incomprehensible,” Michael Behrendt added. Hapag-Lloyd has therefore announced further rate increases for various trades in November and December.

At the end of the first nine months of the current financial year, cumulative EBITDA came to EUR 305.4 million, which was a EUR 60.4 million increase on the previous year’s figure. There was a more than fourfold increase in the positive operating result to EUR 80.4 million (previous year: EUR 17.9 million). The group posted a cumulative net result of EUR -56.1 million in the first nine months of the year, which is EUR 38.0 million higher than in the previous year.

The improvement in earnings in the first nine months was due to the company’s significant, global cost savings as well as a slight drop in the bunker consumption price. Fuel costs averaged USD 617/tonne between January and September (previous year: USD 665/tonne) and therefore remain very high in conjunction with freight rates that are clearly too low.

www.hapag-lloyd.com

Quelle: LogEastics
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