Freight News, Sea

Hapag-Lloyd achieves net profit in third quarter

[ November 23, 2016   //   ]

Hapag-Lloyd closed the third quarter with a net profit of EUR 8.2 million (previous year: EUR 3.2 million) and an operating result (EBIT) of EUR 65.6 million (previous year: EUR 80.9 million). Hapag-Lloyd was able to generate a positive operating result of EUR 25.9 million in the first nine months of 2016.

“The market has been very difficult so far this year, but in that environment Hapag-Lloyd has performed relatively well, which underlines our competitiveness, and we are pleased to report a net profit in the third quarter” said Rolf Habben Jansen, CEO of Hapag-Lloyd. “The overall results so far this year remain unsatisfactory, but the net profit in Q3 indicates that we are on the right track and that our efforts to further reduce costs and to leverage economies of scale are paying off.”

Jansen emphasized that Hapag-Lloyd’s main focus for the upcoming quarters will be to further optimize its cost position, ensure a smooth implementation of THE Alliance and to complete the transaction with UASC, to further solidify its position in this consolidating industry.

In the first nine months of 2016, Hapag-Lloyd transported a total of 5.65 million TEU, around 1.3% more than in the prior year period. The average freight rate fell sharply, decreasing by 17.7% year on year in the period from January to September to $1,037/TEU. The decline was partly due to a fall in bunker prices compared with the previous year, but also due to prevailing overcapacity in the main trades combined with modest demand growth. Hapag-Lloyd’s average bunker consumption price came to $195/tonne in the first nine months of 2016, and was thereby $138 below the previous year’s figure.

The substantially lower rate level had a noticeable impact on the Company’s revenue of EUR 5.7 billion in the first nine months of 2016, which was approx. EUR 1.1 billion down on the previous year. At the same time transport expenses also fell considerably by EUR 787.7 million, or 14.2%, to just under EUR 4.8 billion in the same period. EBITDA came to EUR 381.3 million in the first nine months of 2016 (previous year: EUR 690.6 million), while EBIT totaled EUR 25.9 million (previous year: EUR 348.6 million). The net result of EUR -133.9 million for the first nine months was dominated by the disappointing result development in the first two quarters of the current year.

As at 30 September 2016, Hapag-Lloyd had an equity ratio of 44.6% and a liquidity reserve totaling EUR 559.2 million.