TUI reports improved shipping result
TUI AG today reported an improved first quarter performance by its shipping division, and said the separation of container line Hapag-Lloyd is progressing according to plan.
The Hanover-based company said the shipping division's quarterly operating earnings improved to 24 million euros ($39 million), compared to a loss of 33 million euros in the 2007 first quarter.
Revenue for the division rose 2.4 percent to 1.51 billion euros ($2.4 billion).
“In the first quarter of 2008, Hapag-Lloyd achieved a significant increase in freight rate levels,” said TUI Chief Executive Officer Michael Frenzel at the group’s annual general meeting. “We expect this trend to continue. On the other hand, transport volumes rose only slightly year-on-year and do not yet match expectations, a trend attributable in particular to a slowdown in transatlantic transports.
The routes to North America are feeling the effect of the aftermath of the subprime crisis. On the other hand, exports from the U.S. are boosted by the favorable U.S. dollar exchange rate.”
Frenzel added that the executive board is working hard to ensure that it receives the best possible price for Hapag-Lloyd.
“We do not rule out any of the potential options, although our clear preference is a divestment solution,' he told shareholders at the AGM.
“It is our clear commitment to implement the separation of Hapag- Lloyd swiftly and with an optimum result in the interest of all shareholders. We are convinced that we will be able to act in the interest of both investor groups and that the process will end with a strengthened TUI releasing Hapag-Lloyd into the future with new ownership structures, leaving scope to let all our shareholders participate in the value realized. Let me be clear: ‘You, the shareholders, will participate in the realized return.’ “