CSAV Merger, Strong Dollar Push Hapag-Lloyd to Black
- Business & Finance
German container line Hapag-Lloyd ended the first three months of 2015 with a EUR 128.2 million (USD 144.2 million) net profit, shaking off the memories of the same period a year earlier, when the carrier saw a USD 119 million net loss.
The improved results were chalked up to a rise in transport volume and revenue year-on-year due to the merger with CSAV, and the effects of the company’s efficiency programme. A strong dollar and lower bunker bills also helped offset low freight rates, the company said.
EBITDA reached EUR 283.6 million (1Q2014: EUR 2.9 million) and the underlying EBIT was EUR 160.5 million (1Q2014: EUR -63.2 million).
Hapag says that the increase in profit was achieved in a challenging market environment, with an average freight rate in the first quarter of USD 1,331/TEU. This is down USD 91/TEU year-on-year, but the drop in the average freight rate is largely a result of the consolidation of CSAV’s container business, which had a lower average freight rate than Hapag-Lloyd.
Excluding that effect, freight rates were down 1,9 per cent. The transport volume totalled almost 1.8 million TEU (1Q2014: 1.4 million TEU), while revenue came to EUR 2.3 billion in the first three months of the year (1Q2014: EUR 1.55 billion), due to the inclusion of CSAV’s container shipping activities in Hapag-Lloyd’s consolidated financial statements.
”This is a solid start to the year, in spite of the continued price pressure in many of the trades. This quarter we had support from favourable bunker price and a stronger US dollar, but most importantly this is due to the hard work of all Hapag-Lloyd employees. The results include first synergies from the merger with CSAV’s container business and initial savings from our comprehensive efficiency programme,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.
The average bunker consumption price was USD 377/tonne in the first quarter of 2015, which was well below the previous year’s figure of USD 595/tonne.
Due to exchange rate effects and the consolidation of CSAV’s container shipping activities, transport expenses increased by EUR 436 million year-on-year to EUR 1.84 billion. Once translated into US dollars, the expenses were actually USD 207 lower per transported standard container than in the first quarter of 2014, says Hapag.
The company ended 2014 with a net loss of EUR 603.7 million.