Hapag-Lloyd profits up

11/13/2012

German container giant Hapag-Lloyd was able to increase freight rates, revenue and results in the third quarter, although it warned that the market environment “remains challenging”.

Transport volume in the third quarter amounted to 1.3 million teu and revenue of €1.8 billion was 15% higher than in the same period last year. Earnings before interest, tax, depreciation and amortisation for the third quarter was €164.1 million, a year-on-year increase of 56%.

Adjusted earnings before interest and taxes more than doubled to €86.6 million, up from the previous year’s €36.7 million.

Hapag-Lloyd said that the third-quarter results “more than made up” for the operating losses incurred in the first half of the year.

Nevertheless, the group net result for the first nine months of 2012 represents a loss of €94.1 million, compared with a loss of €23.1 million in the same period of 2011.

“The sharp rise in energy costs again weighed heavily on the result. Transport expenses, of which bunker is the largest component, were nearly €750 million higher than last year in the first nine months,” said the line, in a statement.

The average Q3 freight rates rose year on year by 8% to $1,647 per teu, with the line saying that rate increases initiated by Hapag-Lloyd in the first quarter and implemented in the second quarter had “a tangible effect”.

Hapag-Lloyd Chairman Michael Behrendt said: “Given the intense competition and gloomier economic prospects, this is a good result. Unfortunately, given the absence of the peak season, we were not able to continue the upward trend in freight rates in the third quarter.”

In the first nine months of the current financial year the average freight rate rose by 2.2% to $1,574 per teu and transport volume by 2.3% to just under 4 million teu. Revenue for the first nine months of 2012 climbed to €5.2 billion, an increase of 14.6%.

EBITDA after nine months was €245 million, with adjusted EBIT of €17.9 million. The group net result was a loss of €94.1 million, compared with a loss of €23.1 million in the like period of 2011

“The sharp rise in energy costs again weighed heavily on the result. Transport expenses, of which bunker is the largest component, were nearly €750 million higher than last year in the first nine months.”

It added that the fourth quarter would be “dominated by the intensifying effects of the debt crisis in the eurozone”.

It continued: “Liquidity constraints and declining consumer demand mean that retailers and manufacturers are not filling their warehouses but instead reducing their inventories. This noticeably reduces demand for transport services in these markets, especially in southern European countries.

“Despite the burden from high energy prices and the increasingly gloomy economic outlook, Hapag-Lloyd is striving to achieve a positive operating result again for the current financial year, provided that there is no fundamental escalation of the risks in the fourth quarter.”