Hapag-Lloyd nearly halves first quarter losses as revenues rise 3.1pc

GERMANY's Hapag-Lloyd, the world's sixth biggest container line, declared it nearly halved first quarter losses to EUR53.2 million year on year, drawn on revenues of EUR1.65 billion, up 3.1 per cent.

"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," said a company statement accompanying the results.

The improvement was attributed largely to an increase in the average freight rate, which was 4.2 per cent up on the previous year's quarter of US$1,546 per 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 US$627 per tonne in the first three months of 2013.

"Although this figure is lower than that for the prior year, $667 per 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 US$150 - less than a quarter of the current price," said the Hapag Lloyd statement.

"Hapag-Lloyd generated a positive EBITDA of EUR24 million in the first quarter, which represents a considerable improvement on last year's Q1 figure (EUR -21.1 million)," said the company.

The shipping industry peaks during the third quarter, when goods are shipped from Asia to Europe and North America for the run-up to Christmas. This generates above-average transport volume, said the Hapag-Lloyd statement.

During the first quarter of 2013, the group's net result improved by almost EUR40 million compared to the year before, standing at EUR -93.6 million (prior year period: EUR -132.4 million), it said.

"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 Hapag-Lloyd chairman Michael Behrendt.

"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 said rate increases and cost cutting are "bearing fruit". Despite the ongoing uncertainty surrounding the global economy, Hapag-Lloyd is striving for a positive operating result (adjusted EBIT) for the full year 2013," said the statement.