Global shipping line Hapag-Lloyd announced a deeper net loss of EUR100.9 million (US$115.2 million) in the first half of this year, which is EUR58.2 million below the loss of EUR42.7 million in January-June 2017.
This is mainly driven by the ongoing intense competition as well as higher operational costs, partly compensated by synergies coming from the business combination with United Arab Shipping Company Ltd (UASC), said the German ocean carrier in a statement.
Hapag-Lloyd concluded the first half of 2018 with earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR425.2 million. This is EUR61.4 million higher compared to the EBITDA of the first six months of 2017 (EUR363.8 million).
Earnings before interest and taxes (EBIT) stood at EUR88.7 million after six months and therefore close to the level of the first half of 2017 (EUR90.7 million).
“The first half of 2018 was shaped by clearly increasing fuel costs, higher charter rates and a slower than expected recovery of freight rates. In response to that, we have implemented additional measures to recover these costs: we are critically reviewing the economic viability of our ship systems and are further optimizing our terminal contracts, to gain additional relief on the cost side,” said Rolf Habben Jansen, chief executive officer of Hapag-Lloyd.
Revenues climbed to EUR5.4 billion in the first six months of this year from EUR4.5 billion in the same period last year, and the reported transport volume increased by 39% to 5.848 million TEUs from 4.221 million TEUs in the same period last year. The reported average freight rate decreased to $1,020 per TEU in the first half of the year 2018, down from $1,065 per TEU in the first half of 2017.
On a pro forma basis and when compared to the combined business of Hapag-Lloyd and UASC in the first half of 2017, volumes are up 3.9% and rates have increased 3.0%.
Bunker prices increased significantly to $385 per tonne in the first six months of 2018 from $312 per tonne in H1 2017 and mainly contributed to higher operational costs.
Jansen said: “For the remainder of the year, we see a slow but steadily improving market environment, but we recognize that there are still significant geopolitical uncertainties that could influence the market. This only reinforces the necessity to be able to react quickly when needed—and we therefore will accelerate some of our digitalization initiatives and finalize our new strategy until the end of this year.”
The reported figures of the first six months of 2018 include those of UASC and can therefore only be compared to a limited extent with the figures of the first half-year 2017 (including UASC since May 24, 2017), he further said.
