Hapag-Lloyd says H1 Results Prove CSAV Merger was the Right Decision

Volumes were up to around 3.7 million TEU

Although it suffered a profit decline for the first six months of 2015, Hapag-Lloyd's transport volumes for the first half of the year increased to around 3.7 million twenty-foot equivalent units (TEU), up 29.4 percent compared to the same time in 2014, the company reports.

Hapag-Lloyd credits its recent merger with CSAV for the increase, and with that organization's transfer of services and ship systems almost complete, it has targeted net annual synergies of around $400 million fully realized by 2017 - $100 million higher than originally anticipated.

The company also credits its cost and efficiency program OCTAVE, initiated last year, for causing transport expenses in the first six month of 2015 to rise "significantly less" than the transport volume; the program is expected to deliver annual improvements of $200 million in 2016 and beyond.

However, Hapag-Lloyd reported a profit of EUR 157.2 million ($177.9 million) for the first six months of this year, down 9.3 percent compared to EUR 173.3 million ($196.2 million) for the period in 2014.

Hapag-Lloyd's revenue for the first half of 2015 increased by EUR 1.5 billion ($1.6 billion) to EUR 4.7 billion ($5.3 billion), while its average freight rate was $1,296 TEU, a 9 percent decrease from the first six months of 2014.

Rolf Habben Jansen, CEO of Hapag-Lloyd, said that 
"Our results prove that the merger with CSAV was the right decision and an important milestone in the development of Hapag-Lloyd, as we already benefit from the integration – and also see the first results of the OCTAVE program."

He added, "The market environment remains very challenging, but we are well positioned in the market and remain highly resilient due to Hapag-Lloyd's well-balanced portfolio of trades and services."

In April, Jansen expressed surprise over companies struggling with an industry that grows up to 4 percent yearly and argued that box shippers operate in an environment in which it should be possible to turn a profit.