Hapag-Lloyd posts half year loss following UASC integration

Hapag-Lloyd posts half year loss following UASC integration
The company integrated with UASC in May

Hapag-Lloyd recorded a net profit of €16m (US$19.2m) in the second quarter of 2017, although posted a loss of €46.1m (US$55.3m) in its half year results.

Both figures are considerably better than the carrier’s 2016 second quarter and half year results, which were losses of €44.5m (US$53.5) and €142.1m (US$170.7m) respectively.

The half year’s deficit is somewhat attributed to the US$130m integration of UASC, which was completed on May 24, 2017.

Hapag-Lloyd CEO Rolf Habben Jansen said: “The market in container shipping remains challenging, but we have managed to make very good progress in the first half year of 2017.

“We improved profitability significantly and the integration of UASC will be largely completed in the third quarter.”

The integration may also be to blame for the flat growth in freight rates, which increased 1% year-on-year to $1,056 per teu.

However the consolidation of 250,000 teu from UASC helped to boost Hapag-Lloyd’s transport volumes, which grew by 14% to 4.22m teu.

Operating profit (EBIT) also performed strongly, rising to €87.3m (US$105m), up from a loss of €39.7m (US$47.7m) the previous year.

Revenue also shot up from the previous year, growing to €4.5bn (US$5.4bn) compared with €3.8bn (US$4.6bn) in the first half of 2016.

Elsewhere operating result before interest, taxes, depreciation and amortisation grew to €360.4m (US$432.9m), up from €196.7m (US$236.3m) the previous year.

Going forward the carrier predicts transport volumes to increase during the remainder of 2017, while freight rates will remain unchanged compared to 2016.

Overall Hapag-Lloyd expects the UASC merger to generate annual savings of US$435m from 2019 onwards.