Hamburg Sud’s liner revenue up 8% in 2006

Hamburg Sud’s liner revenue up 8% in 2006 German liner and bulk shipping group Hamburg Sud today reported an 8 percent increase in liner shipping revenue last year to 2.7 billion euros ($3.7 billion), compared to 2.5 billion euros in 2005.
   Hamburg Sud doesn’t provide operating or net profit figures, but said its liner revenue contributed about 85 percent of the total group revenue of 3.2 billion euros ($4.4 billion), which was up 5.2 percent over the previous year.
   “In view of the pressure on earnings and costs, the result in the liner services fell below that of the previous year and in line with expectations,” the group said. “In comparison with many other major shipping lines, Hamburg Sud made a very respectable showing in the market.”
   Turnover in the company’s tramp division was 396 million euros ($540 million), down 13 percent on the previous year level, due, among other things, to declining earnings from bulk tonnage, Hamburg Sud said.
   Hamburg Sud and its Brazilian liner subsidiary, Alianca, increased their combined global container throughput 21 percent to 1.84 million TEUs in 2006, from 1.52 million TEUs in 2005. The increase was achieved due to the group’s purchase of the remaining 50 percent stake in Ybarra Sud, the Mediterranean/East Coast South America carrier, at the start of 2006; and the acquisition of FESCO’s cross-trade services between Australia and New Zealand, Asia and the U.S. West Coast at the end of June.
   Hamburg Sud said its vessel capacity increased 1 percent to 201,000 TEUs, as a result of service rationalization and two small ships being removed from the fleet. At the end of the year, the group’s containership fleet stood at 88 ships with 26 owned and 62 chartered in. The total fleet operated by the group, including 51 bulk carriers and product tankers, was down by seven ships to 139 units.
   During 2006, the group invested 348 million euros ($475 million), down from 387 million euros in the previous year, with about half spent on payments on the six “Bahia”-class 3,750-TEU vessels ordered in 2005 and on 10 repeat ships of the “Monte” class ships of 5,500 TEUs and 5,900 TEUs to be delivered by the end of 2008. Some 45 percent of the investment total was allocated to the expansion of the container pool, with a focus on reefer containers, which rose 20 percent to 258,000 units.
   Earlier this year, Hamburg Sud placed an order for six 6,300-TEU “Santa” class ships with Daewoo Mangalia Heavy Industries (DMH) in Romania. The vessels are due to come on stream in 2009 and early 2010.
   Looking forward to its prospects in the container shipping arena for this year, Hamburg Sud said: “The decline in freight rates experienced since mid-2005 has now come to a halt in most of our trades. Since mid-2006 earnings gains have been made, though without reaching the level of previous years.
   “Hamburg Sud sees significantly greater earnings potential in further optimizing its costs. Consequently, the newbuilding program for containerships will be continued, with the goal of reducing unit costs through the deployment of larger vessels.”
   For its other divisions, Hamburg Sud said: “In the area of tramp operations, a quite positive picture is beginning to emerge for 2007. In dry bulk shipping China and India will continue to act as motors of growth and thus offset the expected newbuilding deliveries.
   “The prospects in the product tanker sector also remain positive against the backdrop of what will presumably be continued powerful growth in the People’s Republic of China, and the related increase in the demand for energy. Considerable newbuilding volume is due to be delivered in 2007.”