Despite reporting a loss in the first quarter, Hapag-Lloyd declared that it competed well in the first quarter, pointing to increased freight volumes and lower transportation expenses when compared with the same period last year.
Hapag-Lloyd reported a loss in the first quarter of 119.1 million euros ($163.4 million) compared with a loss of 93.6 million euros in the first quarter of 2013, and noted the result reflects one-off costs for the takeover of CSAV’s container business on April 16. Before-tax earnings showed a sharp increase, with a first-quarter result of 2.9 million euros, compared with 24 million euros in the first quarter of 2013.
Revenue reached 1.55 billion euros in the first quarter, compared to 1.65 billion euros in the same period last year. The company noted, however, that after adjusting for exchange-rate fluctuations brought on by the U.S. dollar, the revenue decline only reflected a 2.3-percent decrease, only slightly off 2013's first-quarter pace. Freight rates also played a factor in low revenues, as the average rate per each TEU declined by $124 from the first quarter of 2013.
“Hapag-Lloyd was, nevertheless, able to make the most of growth opportunities in this difficult market environment, thanks to its global service network and good positioning among its customers," the company said, noting transport volume ticked up by 5.5 percent, year-over-year.
The company said it aims to improve overall freight rates when compared to 2013.
“Our success in achieving this target will depend largely on the development of freight rates in the second half of the year and, above all, on the peak season,” said Michael Behrendt, chief executive officer of Hapag-Lloyd.
“With the expansion of the G6 Alliance to include all east–west trades, which is currently being implemented in our service network, together with the takeover and integration of CSAV’s container segment, which still has to be approved by the competition authorities, Hapag-Lloyd will again significantly improve its ability to compete. This means that we are well positioned for the future and for additional growth,” he continued.
The company noted that it was able to reduce its transport expenses by 86 million euros to 1.404 billion euros, despite the growth in volume of 5.5 percent.
“In particular, it was possible to reduce the cost of purchased services by more than 53 million euros, notably with regard to container transport costs as well as rental charges for charters, leases and containers. Furthermore, bunker expenses declined slightly, due, on the one hand, to the use of more modern and efficient vessels such as the 13,200-TEU newbuildings," according to a company press release.
Hapag-Lloyd also noted that average bunker consumption price fell to $595 per ton in the first quarter, compared with $627 per ton in the first quarter of 2013. But the company said “this still represents a very high overall level that cannot be compensated for in any way by current freight rates, which are far too low.”