Hapag-Lloyd Bucks Industry Trend With 2011 Profit

Hapag-Lloyd‘s operating profit in 2011 declined 83 percent to $133 million from $770 million in 2010, but the German carrier bucked an industry-wide trend as one of the very few ocean lines to close the year in the black.

The container line achieved its main goal of an operating profit in a year “dominated by an unexpectedly aggressive price war in the Far East trade and sharp increases in oil and bunker prices,” said Michael Behrendt, chairman of the Hapag-Llloyd executive board.

Revenue dipped 1.8 percent year-over-year to $8.05 billion on exchange rate fluctuations. Earnings before interest, tax, depreciation and amortization fell to $484 million from $1.2 billion in 2010, according to preliminary figures.

The world’s fourth largest carrier boosted volume 5.1 percent year-on-year to 5.2 million 20-foot equivalent units, while average freight rates were virtually unchanged at $1,532 per TEU against $1,569 per TEU in 2010.

“Considering how unfavorable the market environment was, this result sends out a strong message and once again reinforces the fact that Hapag-Lloyd is one of the most successful line shipping companies,” Behrendt said.

Hapag-Lloyd’s profit comes in a year when the container shipping industry will likely post collective losses of $5.4 billion, according to Drewry, a London maritime consultancy.

Hapag-Lloyd, which will publish audited results on March 22, said net debt increased only slightly to $1.6 billion from $1.5 billion in 2010 despite capital expenditure of some $346 million. The Hamburg-based carrier has secured long-term financing for its order book and had a liquidity reserve of about $990 million at the end of 2011.

Behrendt hailed the agreement on Tuesday that sees German tourism group TUI cut its stake in Hapag-Lloyd from 38.4 percent to around 22 percent and makes the city-state of Hamburg its largest shareholder with a 37 percent holding.

“This is a good solution, as it further strengthens Hapag-Lloyd’s ties with Hamburg and its port.”

-- Contact Bruce Barnard at brucebarnard47@hotmail.com.