Hapag-Lloyd AG said third-quarter profit fell almost 64 percent as Europe’s fourth-largest container-shipping line confronted low peak-season freight rates.
Net income dropped to 16.6 million euros ($22.3 million) from 45.6 million euros a year earlier, the Hamburg-based company said in a statement. The average freight rate declined more than 10 percent to $1,476 per standard container, or TEU, in the quarter.
“The freight rate developments in the third quarter, the peak season for the liner shipping industry, were very disappointing,” Chief Executive Officer Michael Behrendt said in the statement, adding that the pressure on rates continues. “The irrational behavior in the industry, which once again caused rates to drop drastically in October, is totally incomprehensible,” Behrendt said.
The collapse of Lehman Brothers Holdings Inc. in September 2008 and the ensuing debt crisis in the euro area propelled the shipping industry into a slump from which it has yet to recover, damping demand for seaborne transport and generating a glut of vessels.
Revenue at Hapag-Lloyd fell to 1.7 billion euros from 1.8 billion euros, while transport volume rose 8.6 percent to 1.4 million TEU, the company said. The company reiterated its forecast for positive full-year operating earnings.
Hapag-Lloyd, which invested 588.5 million euros in the first nine months, mostly in ships and containers, has announced further price increases for several shipping routes in November and December, the company said.
Hapag-Lloyd has a 4.2 percent market share of the world’s liner fleet, according to Alphaliner. Industry champion Maersk Line, which has a 15 percent share, and its two closest rivals, Mediterranean Shipping and CMA CGM SA, in the second quarter of next year plan to create the largest container alliance in history, called P3, to cut costs and end years of overcapacity. Copenhagen-based Maersk is due to report third-quarter results tomorrow.
Hapag-Lloyd in March 2012 formed an alliance in Asia-Europe trade with APL, Hyundai Merchant (011200) Marine, Mitsui O.S.K. Lines, Nippon Yusen (9101) Kaisha and Orient Overseas (316) Container Line, called G6.
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