German container line Hapag-Lloyd has managed to shake off EUR 173.3 million loss recorded in the first half of 2014, and end the first half of 2015 with EUR 157.2 million profit, due to a jump in transport volumes and revenue brought by the merger with Chile’s Compañía Sud Americana de Vapores (CSAV).
The transport volume increased to around 3.7 million TEU in the first six months of 2015, up 29.4% compared to the same period in 2014 and mainly due to the merger with CSAV. However, the average freight rate in the first half of 2015 came in at 1,296 USD/TEU, 9% below the same period of 2014.
In the first half of 2015 revenue increased by EUR 1.5 billion to EUR 4.7 billion. Earnings increased as a result of initial synergies from the CSAV merger and additional cost savings from the company’s OCTAVE program.
In the first half of 2015, Hapag-Lloyd achieved an EBITDA of EUR 493.3 million (1H2014: EUR 67.2 million) and an operating result of EUR 267.7 million (1H2014: EUR -101.5 million).
The transfer of CSAV’s services and ship systems into the various trades of Hapag-Lloyd was completed in the second quarter of 2015, slightly ahead of the original plan, according to Hapag.
Now that the integration is almost completed, Hapag-Lloyd says it targets net annual synergies of around USD 400 million fully realised by 2017.
This is USD 100 million higher than originally anticipated. The cost and efficiency program OCTAVE initiated in 2014 is expected to deliver annual improvements of approximately USD 200 million as of 2016. OCTAVE includes improvement initiatives in several areas such as procurement and further fleet modernisation.
“After a solid start into 2015, we are satisfied with our results in the first half of 2015,” said Rolf Habben Jansen, CEO of Hapag-Lloyd.
“Our results prove that the merger with CSAV was the right decision and an important milestone in the development of Hapag-Lloyd, as we already benefit from the integration – and also see the first results of the OCTAVE program. We are well on track to achieve clearly positive full year operating results in 2015. The market environment remains very challenging, but we are well positioned in the market and remain highly resilient due to Hapag-Lloyd’s well-balanced portfolio of trades and services.”