Hapag-Lloyd said currency swings and rate competition caused third quarter profit to drop 94 percent year-over-year to $17.5 million, but the German carrier was one of the few major container lines to finish the quarter in the black.
“We performed very well in a demanding market environment. Hapag-Lloyd’s operating result is well above the industry average,” said CEO Michael Behrendt.
The container shipping’s short-term prospects “remain shrouded in uncertainty due to increasing imbalances in global economic developments and the potentially steep downturn in global economic growth,” which “is likely to slow considerably in the next few quarters.”
Hapag-Lloyd’s net profit for the July-September quarter fell from from $294 million a year earlier, while operating earnings before interest and taxes fell 85 percent to $46 million. Through the first year’s first nine months, Hapag-Lloyd had a net loss of $31.2 million, compared with a $530 million profit a year earlier. EBIT declined to $85 million from $683 million.
Hapag-Lloyd’s third quarter revenue fell 13.5 percent to $2.1 billion, largely due to “severe rate fluctuations due to the debt crisis in Europe,” the company said. Like other lines, Hapag-Lloyd collects most of its revenue in dollars but pays most of its expenses in its home currency.
Cargo volume rose 5.1 percent to 1.34 million 20-foot equivalent units, but average rates declined 8.5 percent to $1,529 per TEU. For the year’s first nine months, Hapag-Lloyd’s volume rose 3.9 percent while average rates slipped 0.4 percent to $1,540.
The German tourism and shipping conglomerate TUI said last week it intends to dispose of its 38.4 percent stake in Hapag-Lloyd in January. The remaining shares are held by the Albert Ballin consortium, a Hamburg-based group of investors that includes Kühne Holding, the city of Hamburg and banks and insurers.