Lower Bunker Costs Contribute to €114 Million Hapag-Lloyd Profit

HL's cost per TEU was down as a result of lower bunker costs, but overall transport costs rose, presumably a result of the CSAV acquisition.

Hapag-Lloyd AG (Hapag-Lloyd) has announced it generated a €114 million ($127.5 million) net profit in 2015 despite the challenging shipping markets.

The company announced that earnings before interest, taxes, depreciation, and amortization (EBITDA) amounted to €831 million ($929 million), a jump up over the year previous when EBITDA earnings were €99 million ($110.7 million).

Hapag-Lloyd noted the positive results were helped by a decline in transport expenses per TEU, which decreased by 20.1 percent from $1,363 in 2014 to $1,089 last year.

The company credited lower bunker prices for the decline, noting that the company paid an average of $312 per metric tonne (pmt) for bunkers in 2015, a rate "significantly below" the previous year's level of $575 pmt.

Although lower bunker prices reduced the cost per TEU, overall, transport expenses grew 19.8 percent, rising by €1.2 billion ($1.3 billion) to €7.3 billion ($8.2 billion), while transport volume rose by 25.3 percent year on year to 7.401 million TEU.

These increases were a direct product of the merger with Compañía Sud Americana de Vapores (CSAV) at the end of 2014.

The release also cited "synergies," a cost-cutting programme, and a more competitive fleet as reasons for the successful year.

"The result for the year is in line with our expectations. Hapag-Lloyd has delivered what we promised. Also in comparison with our main competitors, Hapag-Lloyd has made up tremendous ground and is back among the top performers in the industry," said Rolf Habben Jansen, CEO, Hapag-Lloyd AG.

"We've worked hard for this success by quickly integrating CSAV's container business and by exploiting the synergies."

Looking ahead, Jansen said the ongoing consolidation and "the upcoming new alliance set-up" should add stability to the market, and that some recovery of the market could be expected.

In November of 2015 Ship & Bunker reported that reduced bunker costs and the CSAV merger had led to the company to its third consecutive profitable quarter.