[110811.EN.SEA] Hapag-Lloyd Quarterly Pre-tax Profit Increases 62.5pc To US$37 Million

GERMANY's biggest container line, Hapag Lloyd, has posted a 62.5 per cent second quarter operating profit increase to EUR26 million (US$37.19 million), drawn on revenues of EUR1.5 billion.

For the first half of the year, operating profit came to EUR42.1 million, a year-on-year decline from EUR218.1 million. This was attributed to shrinking freight rates, high bunker costs, falling demand for services to Japan due to the March earthquake and tsunami as well as weak dollar against the euro, said the company statement.

The carrier said "pressure on rates" for Asia-Europe services was seen in the first half of the year. The average freight rate in the first quarter of 2011 was $1,563 per TEU but it declined to $1,531 per TEU in the second quarter, resulting in an average freight rate of $1,546 per TEU for the first half.

The carrier said high bunker prices and other energy-related costs have eroded profits. "The price of one tonne of bunker surged from $480 in January to over $630 by June."

In the first half of the year, Hapag-Lloyd delivered 2.5 million TEU, up 3.3 per cent year on year. Except for a decrease in volume of 2.6 per cent for Far East service to 549,000 TEU, all other loops reported increases, including the North Atlantic at 582,000 TEU, up 1.5 per cent, Latin America 559,000 TEU, up seven per cent, transpacific 560,000 TEU, up 8.3 per cent and Australasia 284,000 TEU, up 2.9 per cent.

"The industry services forecast continued good growth for container shipping in the medium to long term. In the short term, however, the development of the sector will be influenced by high crude oil prices and pressure on freight rates as a result of tougher competition particularly in the Asia-related trades," said the company statement.

Source : HKSG.