Hapag-Lloyd: Net loss in 2013, but outlook ‘much better’ for liner shipping

   Hapag-Lloyd said Wednesday that it had a net loss of €97.4 million ($134.3 million) in 2013, smaller than the €128.3 million net loss in 2012, adding that the outlook for liner shipping is brighter.
   Revenue declined to €6.57 billion in 2013 compared with €6.84 billion the prior year. The company said this was due largely to a weaker U.S. dollar, the main currency in the shipping sector.
   The Hamburg-based container carrier, however, increased its operating result and volume in 2013 despite “persistently tough competition.”
   EBITDA was €369 million in 2013 compared with €335 million in 2012; adjusted EBIT was €67 million in 2013 compared with €3 million in 2012.
   The company transported 5.5 million TEUs across all trades in 2013, 4.6 percent more than the prior year.
   Michael Behrendt, chairman of Hapag-Lloyd’s executive board, said the improvement in operating results and higher transport volume “are clear evidence of the strength of Hapag-Lloyd in the global market.”
   But, the company said, “average freight rate continued to disappoint.” In 2013, the average rate was $1,482 per TEU, compared with $1,581 in 2012.
   The company said it was “no longer possible to push through sustainable rate increases in the market from the second quarter, despite good ship utilization at times. The important peak season in the third quarter failed to occur again as in the previous year.”
   “Although Hapag-Lloyd continued to perform well compared to other industry players thanks to the positive operating result, this result nevertheless falls well short of our expectations for 2013 and is ultimately disappointing,” Behrendt said. “However, as one of many market players, we are unable to avoid the general trend in rates, which was again characterized by irrationality in the previous year.”
   The company said its results benefited from cost-cutting measures that it introduced as a direct response to the development of freight rates in 2013. The average bunker fuel price was also lower –$613 per ton in 2013 compared with $660 per ton in 2012. But it noted “with a price level of around $600/ton, bunker still costs around three times as much as at the beginning of 2009.”
   Hapag-Lloyd said “weaker-than-expected economic growth, particularly in the key BRIC states, had a negative impact on global transport volumes in the past year and thus on the course of business. Both the International Monetary Fund and the World Bank had to revise their growth forecasts downwards in the course of the year. Furthermore, the protracted dispute surrounding the U.S. government budget made the markets uneasy in the previous year. However, according to the IMF, the pace of economic growth is expected to pick up noticeably in many key markets during this year and next year compared with 2013.
   It noted, “The IMF anticipates global trade to expand by 4.5 percent and 5.2 percent in 2014 and 2015, with similar growth rates for global container traffic, which is expected to grow by 4.4 percent in the current year and 5.2 percent in the following year, according to forecasts by IHS Global Insight.
   “The outlook is much better for the liner shipping sector, especially as the addition of new shipping capacities will decline and an increasing number of older ships will disappear from the market and be scrapped,” Behrendt said.
   Hapag-Lloyd has two new ships, each with a capacity of 13,200 TEUs, that are scheduled to enter service in April and will be used in the Far East trade within the G6 Alliance.
   Commenting on plans to acquire the container operations of CSAV, overwhelmingly approved by the Chilean shipping company’s shareholders last week, Hapag-Lloyd said, “due diligence is currently being performed and other necessary talks are being held with various stakeholders to prepare for a possible transaction.”