Hapag-Lloyd suffers from unsatisfactory rate development

Hapag-Lloyd’s transport volume increased by almost 6 per cent in the first half of 2014; operating result plunged into the red

In a still tough market environment Hapag-Lloyd container shipping company (Hamburg) increased its transport volume in the first half of 2014. At around 2.9 million TEU, 5.8 per cent more cargo was shipped this year than in the first six months of 2013.

In contrast, the average freight rate developed negatively as a result of persistently tough competition across the market. After a weak first quarter, which is usual in the liner shipping sector, the upturn in the second quarter failed to live up to expectations. Consequently, the average freight rate in the first half of 2014 fell by 98 USD/TEU year on year to 1,424 USD/TEU. Revenue in the first six months amounted to EUR 3.21 billion – EUR 144 million lower than the prior year period, due to the poor freight rate development and the much weaker US dollar. Adjusted for exchange rate effects revenue remained stable (-0.1% compared to the prior year period).

As far as costs are concerned, Hapag-Lloyd reduced its transport expenses by EUR 79 million year-on-year to just under EUR 2.9 billion in the first half-year – despite the sizeable increase in transport volume. Overall, transport expenses per TEU averaged at USD 1,372 in the first half of 2014 – USD 57 per TEU less than the prior year period.

Even with reduced transport expenses, it was impossible to make up for the massive impact that falling freight rates had on earnings. In the first half of 2014, Hapag-Lloyd achieved an EBITDA of EUR 67.2 million (prior year period: EUR 171.8 million) and an operating result of EUR -73.7 million (prior year period: EUR 13.5 million). The group net result of EUR -173.3 million (prior year period: EUR -72.7 million) includes one-off costs relating to the CSAV transaction.

‘The fact that we ended up with this unsatisfactory result despite clear efforts to cut costs is down to the disappointing development of freight rates across all trades’, said Rolf Habben Jansen, CEO of Hapag-Lloyd. ‘We expect, however, to see a better result in the second half of the year even though the environment remains tough’, he added.

www.hapag-lloyd.com/en/home.html

Quelle: LogEastics
Portal: www.logistik-express.com