Hapag-Lloyd reports lower earnings, increased revenue

Hapag-Lloyd reports lower earnings, increased revenue TUI AG said container-shipping operations of Hapag-Lloyd saw third quarter earnings drop 30.5 percent after a one-time charge.
   Earnings before interest, tax, and amortization for the third quarter were 86 million euros ($109 million), before one-time charges in the third quarter, 19.6 percent less than in the same 2007 period. After-charge EBITA was 66 million euros ($83.6 million).
   A tourism company, TUI AG announced in October that it had agreed to divest itself of Hapag-Lloyd early next year to a group of Hamburg investors, but that TUI would retain a one-third equity interest in the world’s fifth-largest container shipping company.
   Hapag-Lloyd's revenue improved 6.9 percent in the quarter to $1.67 billion euros ($2.12 billion).
   “In the third quarter, the development of container shipping was characterized by an increase in transport volumes, a considerable rise in freight rate levels and a pronounced weakening of the U.S. dollar as well as persistently high fuel costs,” TUI said.
   Hapag-Lloyd carried 1.47 million TEUs in the quarter, 6 percent more than in the same period a year earlier. It said average freight rates rose about 13 percent year-on-year across all trade lanes. The rise in freight rates was particularly strong in the transpacific trade lane, at about 22 percent, and in the transatlantic, about 14 percent.
   “Despite a dampening of the overall climate in container shipping, the executive board expects a significant year-on-year increase in the earnings level for the 2008 financial year,” the company said. “To date, the earnings situation in container shipping has been characterized by a substantial rise in freight rates with a moderate increase in transport volumes. It remains too early to provide a final assessment of the repercussions of the financial crisis on the development of world trade. Nevertheless, positive earnings are also expected for the fourth quarter of 2008.”
   The company noted freight rates were “substantially influenced by the further rise in bunker prices,” which average $622 per ton in the third quarter. ' Chris Dupin