Hapag-Lloyd Loses $302M

Hapag-Lloyd, the German container shipping line, swung to a loss of $302 million in the first quarter of 2009 from a $24.5 million profit a year ago on double digit declines in cargo volumes and freight rates.

The world’s fifth largest ocean carrier’s revenue fell 23 percent to $1.5 billion in the three months to March 31 from $1.9 billion as its container traffic shrunk by 15 percent and freight rates were 14 percent down compared to the first quarter of 2008.

For the full year, Hapag-Lloyd “is expected to record a marked decline in earnings due to the global economic crisis,” according to TUI, the tourism group that owns around 43 percent of the carrier.

Commerzbank, a German bank, has forecast Hapag-Lloyd will lose around $545 million in 2009.

TUI said it made a book gain of around $1.35 billion from the sale of a 57 percent stake in Hapag-Lloyd to the Hamburg-based Albert Ballin consortium.

TUI had to lend the consortium $1.35 billion and retain 10 percent more of the carrier than it originally planned to clinch the sale which was in danger of unravelling as the ocean container market slumped in the final quarter of 2008.

Hapag-Lloyd has embarked on a radical restructuring to cut costs by $675 million a year through layoffs, short time working and closure of some regional offices.

Contact Bruce Barnard at brucebarnard47@hotmail.com .