German shipping company Hapag-Lloyd posted a net loss of EUR -46.1 million (USD 55.1 million) in the first half of 2017, slashed from last year’s equivalent of EUR 142.1 million.
The company said that the half-year result includes a number of one-off effects related to the United Arab Shipping Company (UASC) merger, resulting in a net impact on EBIT of approximately EUR -19 million.
However, the merger with UASC boosted the company’s transport volume growth which stood at 14.0% in the first six months, to 4.22 million TEU. The increase includes almost 250,000 TEU from UASC-Group which was consolidated from 24 May onwards.
The combined freight rate of 1,056 USD/TEU is 1% above the Hapag-Lloyd rate of the first half of 2016.
Revenue rose by EUR 732.8 million to EUR 4,518.3 million, which includes EUR 199 million from the inclusion of the UASC Group.
The company’s operating result increased to EUR 360.4 million from last year’s EUR 196.7 million, while its EBIT rose to EUR 87.3 million from EUR -39.7 million.
In the second quarter of 2017, Hapag-Lloyd delivered an EBIT of EUR 83.8 million and a net result of EUR 16 million, returning to black from the last year’s loss of EUR 99.3 million.
“The market in container shipping remains challenging, but we have managed to make very good progress in the first half year of 2017,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.
“We improved profitability significantly and the integration of UASC will be largely completed in the third quarter. That will allow us to start capturing synergies very soon after the integration.”
As informed, overall, the merger with UASC is expected to generate annual savings of USD 435 million from 2019 onwards, while the majority of the savings will already be realized in 2018.
For 2017, Hapag-Lloyd expects that its transport volume will increase, bunker costs, which increased in the first half of 2017, to remain on the same level for the rest of the year, and the average freight rate to remain unchanged compared to 2016. The company’s EBITDA and EBIT are expected to exceed the previous year’s level.
The merger with UASC helped Hapag-Loyd to climb to fifth place among the world’s liner shipping companies.