Hapag-Lloyd’s second quarter profit tumbled to 26 million euros ($37 million) from $294 million in the second quarter of 2010 as declining rates and higher fuel costs offset a 3.3 percent increase in container volume.
The German container line said its results also were affected by soft demand for transport services in Japan following the March earthquake and tsunami, and the dollar’s weakness against the euro. Revenue for the quarter totaled $2.1 billion, down 9 percent after conversion into euros.
Hapag-Lloyd said it expects continued growth for container shipping in the medium to long term but “short-term results will be influenced by high crude oil prices and pressure on freight rates as a result of tougher competition, particularly in the Asia-related trades.”
Hapag-Lloyd’s average freight rate fell to $1,531 per 20-foot-equivalent unit from $1,563 in the first quarter. For the year’s first half, a 4.4 percent increase in average rates to $1,546 was offset by bunker costs that surged from $480 per metric ton in January to more than $630 in June.
Container volume rose 3.3 percent to 2.5 million TEUs. Regional totals included the North Atlantic, 582,000 TEUs, up 1.5 percent; Latin America, 559,000 TEUs, up 7 percent; the Far East, 549,000 TEUs, down 2.6 percent; the trans-Pacific, 560,000 TEUs, up 8.3 percent; and Australasia, 284,000 TEUs, up 2.9 percent.
For the first half of the year, earnings before interest and tax totaled $60 million, down 80 percent from $310 million in the first half of 2010.
TUI, the German tourism group that is Hapag-Lloyd’s largest shareholder, said its quarterly loss widened to $56.4 million from a loss from $17 million a year earlier because of unrest in North Africa, foreign exchange effects and high fuel prices.
TUI has been trying to sell its stake in Hapag-Loyd. A plan for a public listing of the container line was postponed earlier this year.
Contact Joseph Bonney at email@example.com and follow him on Twitter @JosephBonney.