Hapag Lloyd Back in the Black
German container line Hapag-Lloyd has defied the challenging market environment in the containership market and returned to profit in the first quarter of 2015 euros as a stronger dollar and lower bunker prices helped to offset weaker freight rates.
Hapag-Lloyd swung to a first-quarter profit of 128.2 million euros ($143.6 million) from a year-earlier loss of 119.1 million, buoyed by a steep drop in fuel costs and first operational synergies with the CSAV container shipping business it took over at the end of last year.
Its revenue soared to 2.3 billion euros from 1.55 billion euros in the first three months of 2015, and container traffic jumped to 1.78 million 20-foot-equivalent units from 1.4 million TEUs in the year-ago period because of the acquisition of Chilean carrier CSAV.
“This is a solid start to the year, in spite of the continued price pressure in many of the trades,” said Rolf Habben Jansen, CEO of Hapag-Lloyd.
“This quarter we had support from favorable bunker price and a stronger US dollar, but most importantly this is due to the hard work of all Hapag-Lloyd employees. The results include first synergies from the merger with CSAV’s container business and initial savings from our comprehensive efficiency program,” he added.
The average freight rate in the first quarter declined $91 to $1,331 per TEU, largely because of the consolidation of CSAV’s container operation, which had a lower freight rate than Hapag-Lloyd.
The company was upbeat on its outlook for the medium term, citing an orderbook of 16% of the global fleet, its lowest level since 2002 as orders have tailed off from a peak of 56% of the fleet in 2008. It is still forecast that fleet growth will outpace demand growth, particularly on the Asia-Europe trades where ever-larger mega-boxships continue to be ordered and delivered.
