Box carrier Hapag-Lloyd narrowed its loss in 2013 as earnings and volumes improved despite a difficult environment, and expressed brighter hopes for this year with expectations of the oversupply situation relaxing.
“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,” said group chairman Michael Behrendt.
The German shipping line reported a net loss of EUR97.4 million (US$133.8 million) for last year, a better performance from the EUR128.3 million loss of the preceding year. The narrowed loss was achieved in part through cost cuts and lower fuel costs, it said.
EBITDA (earnings before interest, taxes, depreciation, and amortization) increased year-on-year by EUR54.6 million to EUR389.1 million. The operating result also rose from EUR41 million to EUR67.2 million.
Transport volume went up by f 4.6 percent to about 5.5 million 20-foot-equivalent units (TEUs) across all trades in 2013.
The average freight rate “continued to disappoint,” said Behrendt, remaining at $99 per TEU below the previous year’s level at $1,482 per standard unit. Revenue declined to EUR6.57 billion from the previous year’s EUR6.84 billion, due largely to a weaker US dollar.
“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,” stated Behrendt. “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.”
This, he said, blocked their efforts to push through with rate hikes from the second quarter, as did a weak peak season in the third quarter.
Additional cost-cutting measures introduced in 2013 as well as a slightly lower bunker price helped to boost earnings.
Hapag-Lloyd still has two 13,200-TEU newbuildings in its order book, to be deployed in April this year on the Far East trade within the G6 Alliance.
Meanwhile, it announced it will increase rates on the Asia-Arabian Gulf trade lane effective April 15.
The rate hike will be US$200 per TEU and will apply to all cargoes and container types from Asia (excluding Japan) to the Arabian Gulf ports in the United Arab Emirates, Bahrain, Iraq, Kuwait, Oman, Qatar, and Saudi Arabia.