Hapag-Lloyd grows Q3 earnings as it wraps up UASC integration

The German ocean carrier posted year-over-year increases in net profit, revenues and volumes during the quarter as it nears completion of its integration with United Arab Shipping Co., which it officially merged with on May 24.    Hapag-Lloyd’s net profit for the third quarter of 2017 skyrocketed to 54.3 million euros (U.S. $64 million), a sharp increase from the 8.2 million euro profit posted in the third quarter of 2016, the German ocean carrier revealed Tuesday.
   Revenues for the third quarter of 2017 totaled 2.8 billion euros, climbing 45 percent year-over-year, while transport volumes stood at 2.8 million TEUs, a 44.2 percent boost.
   The average freight rate for the quarter stood at $1,065 per TEU, a modest increase from an average freight rate of $1,027 per TEU for the third quarter of 2016.
   The integration with United Arab Shipping Co. (UASC), which Hapag-Lloyd officially merged with on May 24, is almost complete and is on schedule to be finalized by the end of the year, Hapag-Lloyd said Tuesday.
   Hapag-Lloyd was busy during the quarter, announcing in mid-September its purchase of 7,700 new reefer containers. Hapag-Lloyd Chief Operating Officer Anthony Firmin said the company has significantly grown in the reefer market following its merger with UASC.
   In addition, Hapag-Lloyd announced back in September that it had completed the sale of three of its older containerships – the Deira, the Najran and the Sakaka. The 4,101-TEU ships were delivered to UASC from Japanese shipyards back in 1997 and 1998, and had been a part of Hapag-Lloyd’s fleet since the merger.
   Following the sale of the three containerships, Hapag-Lloyd also took delivery of the Al Jmeliyah at the end of September. The vessel was the last in a series of 17 newbuilds contracted to Hyundai Samho Heavy Industries by UASC in the summer of 2013. The series includes 11 15,000-TEU and six 19,900-TEU ships. These units are now all a part of Hapag-Lloyd’s fleet, which consists of 219 ships, Hapag-Lloyd said at the end of September.
   Referring to the delivery, Hapag-Lloyd Chief Operating Officer Anthony Firmin said, “With this newbuild, our fleet – one of the youngest and most modern in the industry with an average age of just 7.1 years – is now complete. We have no plans to order any more newbuilds in the foreseeable future.”
   Looking into the fourth quarter, in October, Hapag-Lloyd raised 352 million euros in gross proceeds through a capital increase, with 96.5 percent of the existing shareholders exercising their subscription rights that were agreed upon on Sept. 28. The move was agreed upon as part of the merger with UASC. Hapag-Lloyd said it would use the proceeds primarily for the repayment of debts and for general corporate purposes.
   Looking further ahead, Hapag-Lloyd said it expects a significant rise in transport volumes, a significant rise in bunker price and an unchanged average freight rate.
   Hapag-Lloyd is a member of “THE” Alliance with Yang Ming, NYK, MOL and “K” Line, which commenced operations at the beginning of April. Ocean carrier schedule and capacity database BlueWater Reporting’s Capacity Report shows THE Alliance’s services have a total combined deployed capacity of 2.1 million TEUs, deploying 239 vessels across 31 loops.