Maritime economy
Hapag-Lloyd slips into the red
While the transport volume remained stable in the first six months at 3.7 million TEU (-0.4% year-on-year), the average freight rate fell by 254 US dollars to 1,042 US dollars/TEU. This corresponds to a decrease of almost 20 percent. Revenue amounted to EUR 3.8 billion in the first half of the year (previous year: EUR 4.7 billion). Transport expenses were significantly reduced by around EUR 600 million or almost 16% compared to the first half of 2015. In addition to a lower bunker price and consumption than in the previous year, this was due in particular to the realization of synergies from the merger with the CSAV container business and the success of the ongoing cost-saving and efficiency programs. However, bunker prices rose again in the second quarter of 2016, while freight rates remained at a low level. This had an additional negative impact on earnings.
EBITDA amounted to EUR 196.7 million in the first half of the current financial year (previous year: EUR 493.3 million) and the operating result (EBIT) was EUR -39.7 million (previous year: EUR 267.7 million). The consolidated result amounted to EUR -142.1 million (previous year: EUR 157.2 million).
"The half-year result is disappointing. Our cost-cutting programs continue to be successful and the synergies from the merger with CSAV are being delivered as planned. However, this is not enough to fully compensate for the significant decline in the average freight rate. Even though freight rates have recently risen again in the peak season in various trade lanes, this recovery has come later than we expected," said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.
"In the second half of the year, our main focus will be on further optimizing our cost base and doing everything we can to ensure that freight rates return to an adequate level. Due to the difficult market environment, it is all the more important to implement the transaction with UASC as quickly as possible. We will therefore begin integrating UASC as soon as the merger has been approved by the competition authorities. The merger will bring us annual net synergies of at least USD 400 million, some of which should take effect as early as next year," Habben Jansen continued.
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