Hapag-Lloyd Posts Profit Despite ‘Unsatisfactory’ Freight Rates

Hapag-Lloyd reported its profit in the second quarter of 2013 was €20.9 million (about US$27.8 million), compared with a net loss of €7.3 million in the same period last year.
“Although intense competition led to unsatisfactory rate levels, substantial cost cuts and a slight drop in the bunker consumption price were the main factors behind the positive net result,” the container line said in a written statement.

Hapag-Lloyd reported its profit in the second quarter of 2013 was €20.9 million (about US$27.8 million), compared with a net loss of €7.3 million in the same period last year.
“Although intense competition led to unsatisfactory rate levels, substantial cost cuts and a slight drop in the bunker consumption price were the main factors behind the positive net result,” the container line said in a written statement.
The average freight rate of $1,499 per 20-foot-equivalent unit was down from last year’s figure of $1,594 per TEU. However, transport volume rose by 2.3 percent year-over-year to 1.39 million TEUs.
Revenue reached €1.706 billion in the second quarter, down from €1.794 billion in the second quarter of 2012.
“While we managed to implement small rate increases at the start of July, it is still not enough,” said Michael Behrendt, chairman of the Hapag-Lloyd’s executive board. “Further rate increases have been announced.”
In the first six months of 2013, the carrier posted a net loss of €72.7 million, compared with a net loss of €139.7 million in the first half of last year. The half-year net loss resulted from the “unusual seasonal weakness” of liner shipping in the first quarter, according to the company.
Revenue in the first half of the year was basically flat year-over-year at €3.358 billion, while the average freight rate was “disappointing” at $1,522 per TEU, which was $17 below last year’s “unsatisfactory” level, Hapag-Lloyd said. From January to June, volume rose by 1.2 percent to more than 2.7 million TEUs. Investments of €463.6 million were made in the first half, with most of the funds going towards ships and containers.
Hapag-Lloyd noted that it is striving for a positive operating result for the full year 2013.