Hapag-Lloyd again reports a net profit in the third quarter

Following on from the second quarter, Hapag-Lloyd once again 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 per TEU, which was well below the previous year’s figure of USD 1,647 per TEU. In contrast, the transport volume increased by 8.6%, 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 rate increases announced in the third quarter could not be achieved sufficiently in the market. This also had an impact on the average freight rate for the first nine months, which at USD 1,506 per TEU was 4.3% lower than the prior year (USD 1,574 per TEU). In contrast, the transport volume between January and September increased by 3.6% year on year to 4.11 million TEU (previous year: 3.96 million TEU), although this was not enough to fully offset the decline in the freight rate. At the nine-month mark, revenue totaled EUR 5.022 billion. The approximately 2.7% year on year decline (from EUR 5.160 billion) is almost entirely attributable to exchange rate effects, in particular the weakness of the US dollar. Adjusted for exchange rate effects, revenue remains at the same level as the prior year.

At the end of the first nine months of the current financial year, cumulative EBITDA came to EUR 305.4 million, which was a sizeable 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). Hapag-Lloyd was able to use the third quarter to further reduce the losses incurred in the first quarter, which is always weak, but failed to offset them due to the disappointing freight rate level. 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 sizeable, global cost savings as well as a slight drop in the bunker consumption price. Fuel costs averaged USD 617 per tonne between January and September (previous year: USD 665 per tonne) and therefore remain very high in conjunction with freight rates that are clearly too low.

Investments of EUR 588.5 million were made in the first nine months of 2013, in particular in ships and containers. Long-term financing has already been secured for the vessels on order and all the investments in containers which have been made and are planned. Equity of approximately EUR 3 billion and an equity ratio of 41.8% (as at 30 September) illustrate that Hapag-Lloyd’s financial structure remains sound. With liquidity reserves of over EUR 690 million (including unused credit lines as at 30 September), the company is securely positioned for the future. < Korea Shipping Gazette >