Hapag-Lloyd said it had a net loss of 173.3 million euros ($231.5 million) in the first half of the year, compared to a loss of 72.7 million euros in the same 2013 period. The loss includes one-off costs related to its planned acquisition of the liner business of CSAV.
It said revenue in the first six months was 3.21 billion euros, 144 million euros lower than the prior-year period, due to poor freight-rate development and a weaker U.S. dollar. It said
when adjusted for exchange rate effects, revenue remained stable compared to the prior-year period.
The company had earnings before interest, taxes, depreciation and amortization of 67.2
million euros, compared to 171.8 million euros in the first half of 2013. It turned in an operating loss of 73.7 million euros in the first half of 2014, compared with an operating profit of 13.5 million euros in the first half of 2013.
The company moved about 2.9 million TEU of container cargo in the first half of 2014 — 5.8-percent more than in the first six months of 2013 — but said "the market environment remains difficult."
It continued, "The average freight rate developed negatively as a result of persistently tough competition across the market. After a weak first quarter, which is usual in the liner shipping sector, the upturn in the second quarter failed to live up to expectations."
It said the average freight rate in the first half of 2014 fell by $98 per TEU, or 6.8 percent year-over-year, to $1,424 per TEU.
"The fact that we ended up with this unsatisfactory result despite clear efforts to cut costs is down to the disappointing development of freight rates across all trades," said Rolf Habben Jansen, chief executive officer of Hapag-Lloyd. "We expect, however, to see a better result in the second half of the year, even though the environment remains tough. We’ll continue to cut costs, and our merger with CSAV will enable us to realize synergies worth at least $300 million per annum in the future.".
The merger with CSAV is still subject to the approval of approximately a dozen competition authorities around the world. The company said, "The first major milestone was reached at the end of July, when the transaction was rubber-stamped by the relevant U.S. authorities."
The merger is expected to be concluded in the fourth quarter, once all the key competition authorities have granted their approval.
Hapag-Lloyd said, "Where legally permitted, preparations are already under way to integrate CSAV’s container business into Hapag-Lloyd, in order to benefit from the synergies as soon as possible after the closing."
The company said it is still aiming "for a positive operating result for 2014 as a whole, albeit clearly lower than in 2013."