Hapag-Lloyd sees operating growth Q2

Hapag-Lloyd improved its operating result in Q2 2011, although its net result, which has yet to be confirmed, is expected to have remained in the red.

The Hamburg-based carrier's revenue of EUR 1,484.7 (USD 1,031) million was the same as the first quarter of the year, with a 2% decline in average freight rate, to USD 1,531 per TEU, being compensated by an 8.9% increase in cargo, to 1,303,000 TEU.

On the other hand, the operating profit (EBIT) extracted out of this rose from EUR 16.1 million to EUR 26 (USD 18) million, despite the rising cost of fuel, meaning that cost control elsewhere was much greater. However, after deducting interest payments, the bottom line result is expected to be little different to the loss of EUR 22.1 million from Q1 2011.

The operating result for the first half looks poor compared to the same period of 2010, with revenue increasing by just 2.2%, to EUR 2,967.8 (USD 2,061) million, but operating profit plummeting from EUR 218.1 million to just EUR 42.1 (USD 29.2) million, producing a return on sales (RoS) of just 1.4%. This was despite cargo increasing by 3.3%, to 2,500,000 TEU, and the average freight rate rising by 4.4%, to USD 1,564 per TEU.

Increased fuel, charter rates and depreciated currency exchange were cited as the main culprits, with the price of fuel this year increasing from USD 480 per tonne in January to USD 630 tonne in June. Last year's fuel price in Rotterdam during the first half of last year was also around USD 450 tonne.