Hapag-Lloyd earnings soar

Hapag-Lloyd earnings soar

Hapag-Lloyd on Thursday joined the growing list of container shipping lines to unveil sparkling second-quarter earnings on the back of higher traffic volumes and stronger ocean freight rates.

Hapag-Lloyd's parent, diversified German transport and tourism group TUI, said the carrier was mainly responsible for net profit at its shipping division soaring 56.7 percent to 47 million euros ($50.8 million) in the three months to June 30. Revenue inched up 1.3 percent to 577 million euros ($623 million).

The strong performance in container shipping, which lifted TUI's overall logistics profit by 65 percent to $76.7 million, more than compensated for the decline in revenue and earnings in the cruise unit due to the Iraq war and the outbreak of the SARS virus.

The improved earnings were driven by a 9 percent rise in traffic to 517,000 TEUs and higher freight rates on almost all trade routes, including the North Atlantic and Europe-Asia. Rates on the South America trade were depressed by the weakness of regional economies.

Profits would have been higher if not for the year-on-year decline of the dollar, the key freight rate currency, against the euro, TUI said.

The second-quarter result boosted shipping's first-half profits to $72.4 million from $13 million in the 2002 period. Container volume increased 11 percent to 988,000 TEUs and across-the-board rate increases on most routes increased revenue by 8.1 percent to $1.2 billion.

The rest of the logistics division, which includes the VTG-Lehnkering transport group, and the Pracht forwarding unit, posted a second-quarter profit of $26 million, down from $28 million a year earlier.

Overall, TUI swung to a net profit of $546.5 million in the second-quarter from a year-earlier loss of $48.6 million, helped by a one-time gain of $830 million from the sale of its Preussag energy business.