Hapag-Lloyd posts first quarter results
Although its operating environment has remained challenging, Hapag-Lloyd finished the first quarter of this year in a much better position than last year, said in the company's press release.
As expected, the company posted a loss in what is traditionally the weakest quarter of the year for the liner shipping sector. However, it halved its loss before interest and taxes compared with Q1 2012. Revenue came to EUR 1.65 billion in the first three months of 2013 – an increase of 3.1% on the same period of the previous year. This was mainly attributable to a rise in the average freight rate, which was 4.2% up on the previous year at USD 1,546/TEU. In addition to this, the transport volume edged up slightly to around 1.33 million TEU (prior year period: 1.32 million TEU).
The bunker price averaged USD 627/tonne in the first three months of 2013. Although this figure is lower than that for the prior year (USD 667/tonne) and therefore relieved the pressure somewhat, it means that bunker prices remain persistently high. At the end of 2008, a tonne of bunker cost around USD 150 – less than a quarter of the current price.
Hapag-Lloyd generated a positive EBITDA of EUR 24.0 million in the first quarter, which represents a considerable improvement on last year’s Q1 figure (EUR -21.1 million). The adjusted EBIT came to EUR -53.2 million. This meant that the Company almost halved its loss as against the first quarter of 2012 (EUR -99.5 million). The result is in line with expectations for Q1, which is traditionally the weakest season for liner shipping because of the Chinese New Year celebrations. The most important time of the year for the liner shipping industry is the peak season during the third quarter, when goods are shipped from Asia to Europe and North America for the run-up to Christmas. This generates an above-average transport volume. During the first quarter of 2013, the Group net result improved by almost EUR 40 million compared to the prior year period, standing at EUR -93.6 million (prior year period: EUR -132.4 million).
“Liner shipping started 2013 on a higher level than in 2012. However, the competition remains extremely challenging. Rates have come under tangible pressure since April, especially on the important East-West routes, and competition is also becoming tougher on Latin America trades,” said Michael Behrendt, Chairman of the Executive Board of Hapag-Lloyd. “It is important that rates soon return to a sensible, profitable level. This is absolutely essential and in the interests of everyone who relies on a functioning, reliable maritime shipping industry – from shipping lines to shippers. We cannot afford a repeat of last year’s non-existent peak season.”
Hapag-Lloyd has already announced further rate increases on all trades and is also taking additional steps to cut costs. These efforts started bearing fruit in the first quarter. Despite the ongoing uncertainty surrounding the global economy, Hapag-Lloyd is striving for a positive operating result (adjusted EBIT) for the full year 2013.
With an equity ratio of 44.2% (as at 31 March 2013), Hapag-Lloyd has a sound balance sheet structure. Full financing has already been secured for all the investments in containers and ships which have been agreed to date.
