The Hamburg S?d Group said revenues increased to around 3.19 billion euros ($4.35 billion) in 2006, a gain of 5.2 percent from the previous year, as container volumes jumped 21 percent to 1.84 million TEUs.
The German company said container revenues of $3.67 billion, which accounted for 85 percent of total revenues, increased by only 8 percent as freight rates came under pressure in most of its services.
It said the decline in freight rates experienced since mid-2005 has come to a halt in most of its trades. "Since mid-2006 earnings gains have been made, though without reaching the level of previous years," it said in the earnings statement.
Profits from its liner division fell below 2005, but were "in line with expectations" because of the increase in costs and decline in rates. It did not release profit figures.
"Since cash flow reached the planned level, 2006 can be described as still satisfactory from the viewpoint of our shipping group," the statement said.
Its core trade lanes from Europe, North America and Asia to South America's East Coast recorded "very pleasing market growth." Exports from Brazil, however, were damped by the hefty revaluation of the Brazilian real, which made exports barely competitive in many markets.
Growth in its traditionally strong reefer trade from Brazil and Argentina fell below expectations, and was worsened by outbreaks of bird flu and hoof-and-mouth disease.
Hamburg S?d said all trade lanes to South America's East Coast suffered from substantial overcapacity, which led in part to sharp declines in freight rates, particularly in the off-peak season. As a result, many carriers, including Hamburg S?d, streamlined their services in the latter months of the last calendar year, adjusting capacity to cargo volume.
It said trade routes between South America's West Coast, Europe and North America also displayed "quite pleasing development." Market volume from Asia grew yet again, by around 20 percent, although freight rates came under considerable pressure at times due to even sharper increases in capacity.
Hamburg S?d in 2006 launched its Trident Service linking Europe, North America's East Coast and Australia/New Zealand. It switched the service from a fortnightly to a weekly frequency at the beginning of 2007 and boosted the number of vessels deployed from the original six, to twelve 2,500-TEU ships with high reefer capacity.
The group said its experienced significant increases in volume in the service between the U.S. West Coast and Australia/New Zealand as a result of the takeover of cross trades operated by Fesco of Russia. The same held true for the services between Asia and Australia/New Zealand. The Australia/New Zealand region more than doubled its throughput.
Slot capacity of container vessels deployed in liner services grew by just 1 per cent, to 201,000 TEUs, a result of service rationalization. Due to the reduction in the share of smaller units, the number of container ships fell by two, to 88.
Hamburg S?d Group's fleet, including 51 bulk carriers and product tankers, comprised 139 vessels at the end of 2006, down from 146 in 2005. The number of group-owned vessels was unchanged at 27. Container inventory grew to 258,000 units, up 20 percent.
The group said it aims to increase its share of ships and containers, so its capital investment remained at high levels in 2006.
Half of its investment covered payments on six Bahia-class, 3,750-TEU vessels ordered in 2005 and on 10 reorders for Monte-class ships of 5,500 to 5,900 TEUs, to be delivered by the end of 2008. Forty-five percent of spending was allocated to the expansion of the container pool, especially reefer containers.