German shipping major Hapag-Lloyd finished the first three months of the current financial year with a positive operating result, in spite of higher bunker prices.
Although the company’s EBITDA improved by 6.4% to EUR 131.3 million from last year’s EUR 123.4 million, Hapag-Lloyd informed that its net loss widened to EUR -62.1 million from EUR -42.8 million seen in the same quarter in 2016.
Hapag-Lloyd said that the first-quarter result “was noticeably affected by ongoing bunker price increases.” At 313 USD/tonne, the average bunker price was clearly above the previous year’s figure of 197 USD/tonne, representing the highest level seen since June 2015.
The transport volume increased by 6.8% year-on-year to more than 1.9 million TEU from 1.8 million TEU handled in the same period a year earlier. While the average freight rate was USD 20 lower than in the first quarter of the previous year at 1,047 USD/TEU, there were further signs of a slight upward curve compared with the past quarters, according to the company.
The greater transport volume and exchange rate effects pushed revenue up by 10.4% to EUR 2.13 billion from EUR 1.93 billion seen in the corresponding period in 2016.
Rate increases were introduced in a number of trades even though the industry environment remains challenging, but these rate increases “are only going to have an impact on the company’s result later in the year,” Hapag-Lloyd said.
“Our activities in the first quarter focused on preparations for the merger with UASC and on the launch of our new alliance. The launch of the THE Alliance went well, and the merger with UASC will be closed shortly,” Rolf Habben Jansen, CEO of Hapag-Lloyd AG, said.
“After the closing our priority will be to integrate UASC into Hapag-Lloyd quickly and to realize initial synergies from the merger,” Jansen added.
The merger with the Arabian liner shipping company is expected to generate annual savings of USD 435 million from 2019 onwards, with a large proportion of this already to be achieved in 2018, according to the company.