Bruce Barnard, Special Correspondent | May 10, 2012 9:12AM EDT
German ocean carrier Hapag-Lloyd’s first quarter net loss widened to 132.4 million euros ($172 million) from 22.1 million euros ($28.7 million) a year ago as lower freight rates and higher fuel costs outweighed double-digit growth in container traffic.
Revenue grew 8 percent in the seasonally weak quarter to $2.08 billion on a 10.5 percent increase in traffic to 1.323 million 20-foot equivalent units, driven by above-average growth in the trans-Pacific and Australasian trades.
The world’s fourth-largest carrier lost $27.4 million before interest, tax, depreciation and amortization, compared with earnings of $110 million in the first three months of 2011. There was a $134 million operating loss, compared with a $16 million profit last year.
The average freight rate declined 5.1 percent to $1,484 per TEU from $1.563 per TEU a year ago because of a “persistent level of competition.” Rates in the Europe-Far East trade slumped 21.5 percent to $1,186 per TEU from $1,511, but trans-Pacific rates rose to $1,753 per TEU from $1,707 per TEU, and Atlantic rates were just $5 lower at $1,751 per TEU.
The impact of recent significant freight rate increases inn all major trades will start to impact on the bottom line in the second quarter.
The short-term prospects “remain shrouded in uncertainty” because of the recession in the eurozone, slowing economic growth in China and a high budget deficit in the U.S., the Hamburg-based carrier said. Soaring bunker prices also burden the industry.
But the company expects to book a full-year profit, provided there is no escalation of risks and assuming it can implement further rate hikes this year.
The carrier said its performance in the upcoming peak shipping season will largely determine whether it can achieve its earnings forecast.
Contact Bruce Barnard at brucebarnard47@hotmail.com.
