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Port Report: Hapag-Lloyd Sees 'Decent Start' To 2019

Port Report: Hapag-Lloyd Sees 'Decent Start' To 2019

Hapag-Lloyd reported first-quarter results that were better than expected thanks to strength in its Trans-Atlantic franchise, better exchange rates, and the one-time effect of an accounting rule change.

Owner of the fifth-largest container ship fleet globally, Hapag-Lloyd reported net profit to shareholders of $104.4 million, based on the average exchange rate for the quarter. That compares to a $42.2 million dollar loss in the year earlier period.

On a constant currency basis, Hapag-Lloyd saw revenue rise 8.6 percent from a year earlier to $3.9 billion.

The results, which the company said, "were slightly above expectations", cheered Investors and drove up Hapag-Lloyd shares 4.4 percent for the day during European trading hours.

Chief Executive Officer Rolf Habben Jansen said the company "got the year off to a very decent start" thanks to higher transport volumes, better freight rates and a stronger U.S. dollar.

Transport expenses of $2.67 billion for the quarter were essentially flat with the year earlier based on the comparable exchange rates. The expense line had a $114 million benefit from the change of how Hapag-Lloyd accounts for lease expenses related to long-term charter of vessels and container rental.

But fuel expenses were up 14 percent from a year earlier to $425 per ton, to total $450 million for the quarter.

Total fuel use was essentially flat at 1.1 million tons for the first quarter, despite the higher transport volumes. On a container basis, fuel was $161 per twenty-foot equivalent unit (TEU). About 15 percent of fuel used was 0.1 percent sulfur content, used in near-shore waters of North America and Europe.

As for its strategy for dealing with the International Maritime Organization's 2020 limit of sulfur emissions to 0.5 percent, Hapag-Lloyd will mostly tap low-sulfur fuel markets. But it will install exhaust gas cleaning systems of 10 of its largest container ships and test the use of liquefied natural gas on one large vessel.

Average freight rates during the period were $1,079 per TEU, up from $1,029 in the year earlier period.

Average freight rates during first quarter (Source: Hapag-Lloyd)

Atlantic rates were up 4.5 percent to $1,351 per TEU. Trans-Pacific rates were up 7 percent to $1,338 per TEU. Rate increases for Far East and Latin America trades were also positive for the quarter, Hapag-Lloyd said.    

Overall transport volume was up 2.4 percent for the quarter to 2.929 million TEU for the quarter. The volume gains were led by the Atlantic and Far East trades both rising 7 percent for the year.

Transported volumes during first quarter. (Source: Hapag-Lloyd)

APM Terminals upgrades Suez canal site

Maersk unit to work with government of Egypt on Port Said site. (Safety4Sea)

PSA boosts connectivity to Singapore airport

Box port operator will work with airport' chief cargo handler to expedite freight (Splash247)

Maersk comes out against slow-steaming proposal

Container ship owner said proposal would favor older, inefficient vessels. (Lloyd's List)

Image sourced from Pixabay

The post Port Report: Hapag-Lloyd sees ‘decent start' to 2019 appeared first on FreightWaves.

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