Reduced Bunker Costs, CSAV Merger Helps Hapag-Lloyd to Third Consecutive Profitable Quarter

Reduced bunker prices and a decline in bunker consumption also helped to increase profits.

Hapag-Lloyd Wednesday reported its third consecutive quarter of profitability, with transport volume, revenues, and profits having jumped since the company completed its merger with the container shipping activities (CCS) of Compañía Sudamericana de Vapores (CSAV).

Reduced transport expenses thanks to reduced bunker consumption, and lower bunker prices, helped Hapag-Lloyd to a net income of €3.2 million ($3.4 million) in the third quarter compared to a loss of €50.7 million ($54.5 million) the year before.

In the first nine months of the year, the company has posted a net income of €160 million ($172 million), compared with a loss of €224 million ($240.6 million) last year. 

“We are satisfied with our results for the first nine months of 2015, given the very challenging market environment," said CEO Rolf Habben Jansen.

In particular, the plunge in transport expenses, which reportedly decreased by $240 per TEU to $1,111 per TEU in the first nine months of 2015, helped the company make considerable gains. 

"The decline was mainly due to reduced bunker prices and a decline in bunker consumption as well as synergies related to the integration of CCS," the company said. 

The savings reportedly somewhat helped offset the effect of declining freight rates, which the company said on average has been 12 percent lower in 2015 than in 2014. 

“The third quarter proved once more that the merger with CSAV was the right step and that our cost reduction measures are making us competitive," said Habben Jansen. 

"With the proceeds from the IPO, we will be able to invest in the future to further improve efficiency and profitability.”

Ship & Bunker previously reported that Hapag-Lloyd had completed its rocky IPO earlier this month, having had to struggle with considerable market headwinds.