Eurogate 2018 results heavily affected by shipping line alliances

Eurogate 2018 results heavily affected by shipping line alliances

Eurogate’s Wilhelmshaven terminal recorded a double digit increase in 2018, acting as a shining light amongst a 20.9% decline in net profit and throughput losses at its other terminals affected by the restructuring of shipping alliances.

The group’s net profit for 2018 was €67.3m (US$75.5m) compared to €85.2m (US$95.6m), with the decrease mainly attributed to non-recurring effects which significantly contributed to 2017 operating result.

Michael Blach, chairman of the Eurogate group management board, said: “For Eurogate, 2018 was both an exciting and a challenging financial year, which we were ultimately able to close with an acceptable result.”

The company’s revenue was only slightly below the previous year at €604m (US$677.5m).

Bach continued: “While we can be satisfied with our earnings result for 2018, we surely cannot afford to rest on our laurels.

“Competitive pressure among the shipping lines will continue to increase and present us with significant challenges going forward.”

Wilhelmshaven’s 18.3% growth marked the third consecutive year it recorded a double digit figure, with an excess of 655,000 teu transhipped at the facility for the first time.

The full-year effect of an OCEAN Alliance Far East service acquired during 2017 along with the terminal’s new role as last port of call on a Far East route operated by 2M Alliance were key factors in this growth.

Wilhelmshaven has become particularly attractive to the shipping line alliances due to its nautical conditions and efficiency, especially as it is able to handle ultra large container vessels (ULCVs).

The terminal’s throughput was also boosted by a regular Maersk West Africa service and Eurogate has said that opportunities for further growth in the double-digit percentage remain positive.

Eurogate’s Hamburg facility remained on par with 2017 with only a slight 3% decrease to 1.64m teu despite a weak first six months of 2018 with an approximate decline of 16%.

Capacity utilisation significantly recovered at the terminal thanks to the integration of Hamburg Süd into the Maersk group and the successful acquisition of Hyundai Merchant Marine which halted the negative trend.

Since January 2019, the Hamburg terminal has been included on the itinerary of a Major Asia service operated by the OCEAN Alliance which has also significantly improved capacity utilisation.

Blach said: “We chose to view the extensive changes brought about by the restructuring of the alliances as an opportunity to be harnessed as best we could.

“The positive trend that we saw in Hamburg from May 2018 and in Wilhelmshaven throughout the year shows that our efforts have paid off.”

However, despite its efforts, Eurogate’s Bremerhaven terminal recorded a slight loss of 1.3% to 5.47m teu in 2018, although new schedules implemented by shipping line alliances had no significant impact.

Future prospects for the terminal are “somewhat clouded” by the withdrawal of four transatlantic services operated by THE Alliance in favour of Hamburg-Altenwerder with effect at the beginning of 2019.

Eurogate has hope that developments at NTB North Sea Terminal Bremerhaven and at MSC Gate will allow it to largely compensate for the volume losses in the medium term.

With regards to Eurogate International, significant declines in transhipment terminals in Italy negatively impacted handling volumes.

Cagliari in particular lost almost 50% of its handling volumes due to the transfer of scheduled services to other terminals while Giaia Tauro recorded a decline of 4.5% but remains at a high volume of 2.29m teu.

Against the trend, the La Spezia and Salerno terminals recorded increases of 0.8% to 1.35m teu and 5.6% to 332,000 teu respectively.

Other terminals within the Eurogate group also reported stable handling volumes year-on-year overall.

An approximate 30% strike-related decline in volumes at Lisbon, Portugal, to 137,000 teu was offset by the positive development of the location in Limassol, Cyprus, of around 14% to almost 394,000 teu.

In Tangier, Morocco, the handling volume remained at the same high level as the previous year with 1.38m teu while the transhipment volume in Ust-Luga, Russia, declined 7.1% to 69,000 teu due to sanctions.

An already high market concentration among the shipping line alliances and the unabated trend towards ever large container ships continue to increase the cost and performance pressure on terminal operators.

As a result, Eurogate has planned to make every effort to remain competitive and believes that it is well positioned for continued success.