GERMAN shipping giant Hapag-Lloyd returned to profitability in first quarter with a profit of EUR128.2 million (US$144.4 million) from a year on year loss of EUR119.1 million. This year's profit was drawn on revenues of EUR2.3 million, which increased 53.3 per cent.
The increase in profit was achieved in a challenging market environment. But the drop in the average freight rate was largely a result of the consolidation of CSAV's container business, which had a lower average freight rate than Hapag-Lloyd.
Hapag-Lloyd generated a profit in the first three months of this year, and concluded the first quarter with a profit of EUR128.2 million (prior year period: EUR -119.1 million).
"This is a solid start to the year, in spite of the continued price pressure in many of the trades. This quarter we had support from favourable bunker price and a stronger US dollar, but most importantly this is due to the hard work of all Hapag-Lloyd employees," said the company statement.
The results include first synergies from the merger with CSAV's container business and initial savings from our comprehensive efficiency programme," said CEO Rolf Habben.
The average bunker consumption price was $377 per tonne in the first quarter of 2015, which was well below the previous year's figure of $595 per tonne.
Due to exchange rate effects and the consolidation of CSAV's container shipping activities, transport expenses increased by EUR436 million year on year to EUR1.84 billion.
Once translated into US dollars, they were actually $207 lower per transported standard container than in the first quarter of 2014.
"With an equity ratio of around 42 per cent (as at 31 March 2015), Hapag-Lloyd has a strong balance sheet structure. With a liquidity reserve of more than EUR1 billion, the company is well financed for the future.
Source : HKSG.