Hapag-Lloyd achieves steep earnings rise in 2nd quarter
• NOL, Hamburg consortium only bidders left for Hapag-Lloyd
German tourism and shipping group TUI AG today reported a strong second quarter performance by Hapag-Lloyd, the container shipping subsidiary it is in the process of selling.
Buoyed by very healthy freight rate increases, especially in the major east/west arterial routes, Hapag-Lloyd saw its second quarter underlying earnings before interest, tax and amortization (EBITA) reach 115 million euros ($183 million), up from 5 million euros in the same period in the previous year. TUI’s revenue from container shipping for the period improved 2.6 percent to 1.51 billion euros ($2.4 billion).
Hapag-Lloyd’s global container volumes in the second quarter increased 3.7 percent to 1.43 million TEUs, while the average freight rate per TEU jumped 16.2 percent to $1,568 from $1,350.
The regional picture for the volume and freight rate changes was:
' Far East/Europe: 346,000 TEUs transported, down 1.9 percent; average freight rate of $1,622 per TEU, up 28 percent.
' Transpacific: 280,000 TEUs (up 7 percent); $1,666 per TEU (up 17.2 percent).
' Transatlantic: 366,000 TEUs (down 3.9 percent); $1,700 per TEU (up 17.1 percent).
' Latin America: 248,000 TEUs (up 8.9 percent); $1,501 per TEU (up 11.5 percent).
' Australasia: 194,000 TEUs (up 21.3 percent); $1,172 per TEU (down 0.6 percent).
TUI noted a contraction for consumer goods in Europe causing volumes in the Asia/Europe and transatlantic trades to shrink. The freight rate growth achieved in the Asia/Europe trade was mainly driven by increasing implementation of freight rate surcharges to account for the higher bunker fuel costs, TUI said.
In the transpacific, Hapag-Lloyd’s biggest rate increases were achieved in the North America to Asia route, which also experienced increased volume with renewed demand for American products in Asia on the back of the weakening U.S. dollar. The same factor also meant that the highest rate increases in the transatlantic came from North American exports.
For the first half of 2008, Hapag-Lloyd returned operating earnings (underlying EBITA) of 133 million euros ($212 million), as opposed to a loss of 31 million euros in the year prior period. Revenue after six months gained 2.2 percent to 2.96 billion euros ($4.7 billion). First half container volume was 2.75 million TEUs, up 2 percent, while the carrier’s average freight rate increased 15.3 percent to $1,554 per TEU.
“TUI AG continues to expect earnings by container shipping to rise significantly year-on-year in the 2008 financial year despite an overall slowdown in the economic scenario,” TUI said in a statement.
“As before, risks for the overall year relate to the effects of the crisis in the financial markets on the development of world trade, a final assessment of which is not yet possible. Earnings will also be affected by the development of shipping bunker prices. At the same time, the development of earnings by container shipping will reflect the further development of the U.S. dollar exchange rate against the euro.
TUI added that the separation process for Hapag-Lloyd “is progressing according to plan.” ' Simon Heaney