Hapag-Lloyds Cuts Loss as It Prepares for CSAV Takeover

Hapag-Lloyd AG narrowed its full-year loss for 2013 as the company cut costs and benefited from lower fuel prices before a planned takeover that will make it the world’s fourth-largest container carrier.

Losses dropped to 97.4 million euros ($134.7 million) from 128.3 million euros and transport costs fell by 409 million euros, the Hamburg-based company said in a statement. Operating profit grew by 41 million euros to 67.2 million euros, it said.

“Although Hapag-Lloyd continued to perform well compared to other industry players thanks to the positive operating result, this result nevertheless falls well short of our expectations for 2013 and is ultimately disappointing,” said Chief Executive Officer Michael Behrendt said in the statement. “Irrationality” in the trend in rates in the previous year made it impossible “to push through sustainable rate increases in the market from the second quarter, despite good ship utilization at times.”

Hapag-Lloyd, Germany’s industry leader with a fleet of 151 vessels, plans to take over the container shipping operations of Valparaiso, Chile-based Cia. Sud Americana de Vapores SA, or CSAV. The acquisition will help counter the prolonged shipping slump and close the gap on the world’s three largest carriers, including A.P. Moeller-Maersk A/S. (MAERSKB) CSAV, which expects a binding deal by the end of April, will get a 30 percent stake in Hapag-Lloyd in return.

Hapag-Lloyd recorded a 4.6 percent rise in transport volume to about 5.5 million standard 20-foot containers, or TEU. Sales declined almost 4% to 6.57 billion euros from 6.84 billion euros, mainly on a weak dollar, the company said. EBITDA rose by 54.6 million euros to 389.1 million euros.

Behrendt said the industry’s outlook in the coming years looks much “brighter” with container traffic expected to grow 4.4 percent this year and 5.2 percent in 2015.

To contact the reporter on this story: Nicholas Brautlecht in Hamburg at nbrautlecht@bloomberg.net

To contact the editors responsible for this story: Angela Cullen at acullen8@bloomberg.net James Kraus, Jim Silver

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.