Hapag-Lloyd Swings to $133 Million Operating Profit

Hapag-Lloyd swung to an operating profit of $133 million in the final quarter of 2010 from a year-earlier loss of $211 million as rising cargo volume and sharply higher freight rates accelerate plans for an initial public offering of the world's sixth-largest ocean container carrier.

Revenue of Germany's largest shipping line soared 33.7 percent to around $2.1 billion from $1.5 billion a year ago, its biggest shareholder TUI reported Feb. 9.

Container traffic rose almost 7 percent year-on-year to 1.2 million 20-foot equivalent units from 1.1 million TEUs due mainly to strong growth on trans-Pacific trade lanes.

By The Numbers: Container Rate Benchmark

Average freight rates jumped nearly 20 percent to $1,639 per TEU from $1,368 per TEU in the final three months of 2009.

TUI, which owns 49.8 percent of Hamburg-based Hapag-Lloyd, said preparations for a possible IPO are "well on track."

TUI will look at the financial markets in the second quarter and then decide if and when it will float its stake, Chief Financial Officer Horst Baier said during a conference call. TUI's main goal remains to maximize the value of its shareholding, Baier said.

The Hannover-based tourism group is also examining whether to retain part of its stake if necessary or sell it to a strategic investor.

TUI has said its investment in Hapag-Lloyd is worth around $2.75 billion of which $2 billion is equity. TUI increased its stake in Hapag-Lloyd to 49.8 percent from 43.3 percent in the final quarter of 2010. The Albert Ballin investor consortium owns the remaining 50.2 percent.

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