In H1, 2016 of the current business year, Hapag-Lloyd achieved an operating result of more than US$ -44.2 million, compared to the prior year’s result of more than $298 million. Revenue reached more than $4.2 billion in H1, 2016, compared to more than $5.2 billion in the prior year period.
Subdued economic growth in many parts of the world, persistently tough competition in the liner shipping industry and further declines in freight rates have marked the first half of the 2016 business year.
Rolf Habben Jansen, CEO of Hapag-Lloyd, said: “The first-half result is disappointing. Our cost saving measures and efficiency programs are on track and the synergies from the merger with CSAV are being realised on schedule.
“But this isn’t enough to completely compensate for the significant drop in the average freight rate. Even though freight rates have finally gone back up towards the peak season in various trades, this rebound is coming later than anticipated and more is needed going forward.
“In the second half of the year, our main focus will be to further improve our cost base and to do whatever we can to get freight rates back to a more sustainable level.
“In this difficult competitive environment, it is very important to complete the transaction with UASC as quickly as possible and to start the integration of UASC immediately after the completion of all pre-closing conditions. The integration will bring us annual net synergies of at least US$400 million, some of which should already take effect next year.”
The focus in H2, 2016 will be on further cost savings, revenue recovery and preparations for the merger with UASC.
During the period under review, Hapag-Lloyd invested more than $199 million in vessels. With an equity ratio of 44.4% and liquidity reserves of more than $863 million, (both as of June 30, 2016), the company is well positioned compared to its international competitors.
(Source: Hapag Lloyd)