Hapag-Lloyd sees moderate growth in container profits

Hapag-Lloyd sees moderate growth in container profits    TUI AG, parent company of Hapag-Lloyd Container Line, reported Thursday a moderate growth in third quarter earnings for its shipping arm, with operating income rising 13 percent to 89 million euros ($115 million) from 79 million euros in the corresponding quarter of 2003.
   The German shipping company’s 13 percent rise in third-quarter operating income contrasts with spectacular profit increases reported by other container carriers in the same quarter, notably the 132-percent jump to $132 million of P&O Nedlloyd Container Line’s container shipping operating income and the 74-percent rise to $244 million in APL’s liner shipping operating income.
   The latest figures suggest P&O Nedlloyd and APL are closing the gap with Hapag-Lloyd, which is one of the most profitable container shipping companies.
   TUI’s shipping division includes Hapag-Lloyd Container Line and the smaller cruise shipping unit Hapag-Lloyd Cruises. The division’s operating profit margin represented 12 percent of revenue in the third quarter, the same as in the same quarter of 2003.
   TUI confirmed that Hapag-Lloyd Container Line enjoyed strong cargo volumes in a favorable market in the latest quarter.
   The Hannover-based tourism-to-shipping conglomerate said its shipping division “recorded sustained growth in transport volumes and a further slight increase in freight rates.” Hapag-Lloyd’s container volume rose 14 percent to 625,000 TEUs and its average freight rate increased 7 percent year-on-year to $1,284 per TEU in the third quarter.
   The shipping division's revenue rose 12 percent in local currency to 725 million euros ($935 million) from 648 million euros, although TUI said the dollar depreciated 9 percent against the euro.
   “The container shipping industry continued to record an increase in demand on the previous year,” TUI said in a statement. “As before, demand ' rose most strongly on the Far East trade.”
   Hapag-Lloyd reported a “brisk growth” on the Far East/Europe route and higher volumes in the intra-Asia lane. The carrier’s transpacific volume rose 12 percent to 162,000 TEUs, while transatlantic cargo volume increased 13 percent to 157,000 TEUs.
   For the first nine months of the year, Hapag-Lloyd's shipping activities raised operating income 35 percent to 193 million euros ($249 million) and revenues 12 percent to 2 billion euros ($2.5 billion).
   TUI reported a 58-percent decline in revenues to 164 million euros ($121 million) from its non-shipping logistics activities, following the sale its former Pracht, Algeco and VTG-Lehnkering subsidiaries.
   TUI said prospects for the remainder of the year are “positive” for container shipping. “The current business trend is characterized by an increase in transport volumes and high freight rates,” it said.