Hapag-Lloyd pre-tax profit up 140pc, but still mired in obligations

GERMANY'S Hapag-Lloyd has posted a first quarter year-on-year pre-tax profit (EBIT) increase of 140.2 per cent to EUR6.1 million (US$22.8 million), drawn on revenues of EUR1.4 billion, up 16.5 per cent.


But after deductions of interest payments and taxes, a group result came to a EUR22.1 million loss. At the same time, the first quarter the cash flow on current operations increased EUR16.1 million to EUR34.5 million euros in 2011.


The murky result arises from its relationship with German travel giant TUI and its dealing with repaying investor, government loans and loan guarantees as well as meeting other obligations to relieve long standing financial pressures on the company.


The company attributed its gain in its core business to a 10 per cent increase in average freight rates to $1,563 per TEU. Volume was up two per cent year on year at 1.2 million TEU, said the company of its quarterly performance.


"Active yield management enabled Hapag-Lloyd to concentrate successfully on profitable cargo, foregoing transports of inferior price quality," said the company statement.


"Given the prevailing conditions, we achieved a good result in the first quarter. Nevertheless, the rise in the oil price, the weak US-dollar and growing competition are making business more difficult," said Hapag-Lloyd Holding AG chairman Michael Behrendt.


Total transport volume in the first quarter rose two per cent to 1.2 million TEU. Transatlantic trades reached last year's level.


Latin America trades were up 6.5 per cent to 265,000 TEU. On the Far East routes, Hapag-Lloyd rejected transport contracts with lower price quality, so that volume was down from 284,000 TEU to 260,000 TEU.


But the transpacific reported positive trends with volume rising from 238,000 TEU to 266,000 TEU year on year. The same applied to Australasia, where Hapag-Lloyd boosted volume by 6.1 per cent to 134,000 TEU. At $1,563 per TEU, the average freight rate was 9.9 per cent higher than the comparable figure for the previous year.
(Source:http://www.schednet.com)