HIGHER LINER PROFITS AT HAPAG-LLOYD DEFY TREND

HIGHER LINER PROFITS AT HAPAG-LLOYD DEFY TREND    Hapag-Lloyd Container Line has defied adverse industry trends by posting an increased operating profit of 186 million euro ($164 million) for last year, up 17 percent.
   Hamburg-based parent company Hapag-Lloyd announced the higher profits of its container shipping arm “despite weaker demand and the resulting significant declines in rates.”
   Hapag-Lloyd Container Line posted sales of 2.2 billion euro ($1.9 billion) last year, with a volume of containers carried of 1.7 million TEUs, up by 8 percent.
   “The volume growth was achieved with almost no increase in staff,” the German group said.
   Gunther Casjens, chief executive officer of Hapag-Lloyd Container Line, said that the shipping line achieved another productivity increase thanks to its information technology systems, and also benefited from the joint management and use of ship capacities within the Grand Alliance.
   Hapag-Lloyd Container Line’s improved results contrast with those of P&O Nedlloyd and OOCL, two Grand Alliance carriers that have posted decreases in operating profits for 2001.
   Casjens said that the strong U.S. dollar was also a positive factor in the carrier’s results. The dollar exchange rate rose by about 7.8 percent on average compared with the previous year.
   Hapag-Lloyd said its liner shipping business again grew faster than the overall market. Its 8-percent increase in container traffic last year compared with a gain of about 2-percent in global container traffic, according the German group.
   Commenting on declining growth rates in liner shipping, Hapag-Lloyd said that the downturn emanating from the U.S. affected other economies, particularly in Asia, but also in Europe.
   “According to the Organization for Economic Cooperation and Development, world trade grew by only 0.3 percent last year,” Hapag-Lloyd said. “Volume in international container liner services rose by close on 2 percent in the last financial year, well down on the 6 percent average growth in recent years.”
   The Hapag-Lloyd group, which includes liner shipping, cruise shipping, forwarding and logistics businesses, posted total revenues of 3.9 billion euro ($3.5 billion) in calendar 2001, up 8 percent when compared to the Oct. 1999/Sept. 2000 financial year.
   Group operating profit after interest rose by 20 percent, to 299 million euro ($265 million). Group net profit soared by 27 percent, to 230 million euro ($204 million).
   The group’s shipping activities, consisting of Hapag-Lloyd Container Line and Hapag-Lloyd Cruises, generated 61 percent of group sales. The remaining 39 percent of group sales came from logistics activities, comprising VTG-Lehnkering, Pracht Freight Forwarding and Algeco S.A.
   Commenting on its German forwarding subsidiary Pracht Freight Forwarding, Hapag-Lloyd said that the forwarding sector “is still suffering from massive overcapacities particularly for domestic general cargo services, which are exerting pressure on profits.” Pracht Freight Forwarding returned an operating profit of 3 million euro (about $3 million) on sales of 169 million euro ($150 million), slightly down on the previous year.
   Michael Behrendt, the new chairman of the Hapag-Lloyd, warned that Hapag-Lloyd Container Line “will have to expect a drop in earnings” this year because of the freight rates.
   He also said that the container line would continue to grow faster than average in the market.