GERMANY's biggest container carrier Hapag-Lloyd posted a 56 per cent year-on-year decline in first quarter operating profit to US$123.4 million, drawn on revenues of $2.1 billion, a drop of 16 per cent.
The decline was blamed on freight rates dropping 19 per cent year on year to $1,067 per TEU on average.
The negative effects of the difficult market environment were partly offset by the cost-cutting and efficiency measures and 52.9 per cent year on year fall in bunker prices to $178 a tonne.
"In the seasonally weak first quarter we recorded an acceptable result with a small operating profit and an EBITDA margin of 6.4 per cent," said CEO Rolf Habben Jansen.
"This was due in no small part to the synergy effects which have been achieved so far as a result of the merger with CSAV and the improvements to our cost base under the OCTAVE programme, which we implemented in 2015," he said.
Both factors together represent around $600 million in annual long-term earnings effects compared to the cost base in 2014, said the company statement.
"The OCTAVE 2 programme will help improve our cost base further by a high, double-digit million dollar amount," Mr Habben Jansen said.
With a fleet of 175 containerships and a total capacity of 955,000 TEU, Hapag-Lloyd has 9,400 employees at 366 sites in 118 countries.
Source : HKSG.