Greater Bunker Efficiency, Lower Prices Help Hapag-Lloyd to a "Solid" First Quarter Following CSAV Merger

CWO Rolf Habben Jansen said the result was "a solid start to the year."

Hapag-Lloyd AG last week published its first quarterly financials since merging with Chilean carrier Compañía Sud Americana de Vapores (CSAV), posting a Q1 2015 profit of EUR126.2 million ($146.2 million) compared to a loss of EUR -119.1 million ($136.1 million) for the period in 2014.

The German shipper noted that "the sharp increase in profit was achieved in a challenging market environment" with greater bunker efficiency, along with lower bunker prices, and a stronger U.S. dollar key in helping it to offset low freight rates.

“This is a solid start to the year, in spite of the continued price pressure in many of the trades. This quarter we had support from favourable bunker price and a stronger US dollar, but most importantly this is due to the hard work of all Hapag-Lloyd employees," said Rolf Habben Jansen, CEO of Hapag-Lloyd AG.

"The results include first synergies from the merger with CSAV’s container business and initial savings from our comprehensive efficiency programme." 

The average price paid for bunkers was reported to be $377 per metric tonne (pmt), a significant decrease over the previous year’s figure of $595 pmt.

Freight rates were said to be down 1.9 percent year-on-year, but the consolidation of CSAV’s container business, which had a lower average freight rate than Hapag-Lloyd, pushed down rates to $91 per TEU to $1,331 per TEU.

Looking ahead, Hapag-Lloyd said its liquidity reserve of more than EUR 1 billion ($1.14 billion) meant it was "well financed for the future" and it would look to further invest in new ship systems in the future.

Last month Janssen said that box shippers operate in an environment in which it should be possible to turn a profit.