Hapag-Lloyd Reports Third-Quarter Profit
Hapag-Lloyd closed the third quarter of 2017 with a significant positive net profit and a much improved operating result. The integration with United Arab Shipping Company (UASC) is almost completed and on schedule to be finalized by the end of the year.
For the third quarter the net profit amounted to $64 million, compared to the prior-year period of less than $10 million. In the first nine months of 2017, Hapag-Lloyd was achieved a profit result after taxes of $10 million, compared to a prior-year period loss of $158 million.
Transport volume increased by 24.4 percent in the first nine months, from 5.65 million TEU to 7.03 million TEU, transport expenses (excluding bunker costs) only rose by 17.8 percent, primarily due to cost savings as well as additional fleet and network optimization.
Freight rates continued to recover in the third quarter, standing at $1,060 per TEU after nine months, compared to $1,037 per TEU for the prior-year period.
“The good operating result that we have achieved after three quarters is not only due to the positive development of the global economy and the increasing global container transportation volume,” said Rolf Habben Jansen, CEO of Hapag-Lloyd AG. “The quick and smooth integration of UASC into the Hapag-Lloyd Group has also played a crucial role. We have already been able to realize the first synergies resulting from the merger which will help us to further solidify our position in the sector.”
Hapag-Lloyd operates 215 containerships and a total transport capacity of 1.6 TEU and operates in the transatlantic, Middle East, Latin America and intra-America trades.
UASC and its subsidiaries have been incorporated into the financial statements of Hapag-Lloyd since May 2017, the date of transfer of control.
The merger with UASC lowered the average ship age of Hapag Lloyds’ fleet to 7.2 years. Hapag-Lloyd said it will save $435 million from the merger, most to be realized by the end of next year. The carrier said it will not be making bid investments in new ships for the next few years.
That could spell continued good news for the carrier, because, as the maritime specialist Alphaliner reports in a recent newsletter, container capacity is still on the rise which could mean pressure on rates in the near future.