Hapag-Lloyd Says Full-Year Net Loss Widens as Fuel Prices Soar
Hapag-Lloyd AG, Europe’s fourth- largest container line, said its net loss widened last year after rising fuel prices outweighed higher freight rates.
The loss rose to 128 million euros ($166 million) from 29 million euros a year earlier, Hamburg-based Hapag-Lloyd said in a statement today. Profit before interest and tax declined to 26 million euros from 101 million euros in the previous period.
The world’s biggest container carriers, including Denmark’s A.P. Moeller-Maersk A/S (MAERSKB)’s Maersk Line, France’s CMA CGM SA and Hapag-Lloyd, had to contend with soaring fuel prices last year at the same time as Europe’s sovereign debt crisis and overcapacity put pressure on freight rates. In the first half of 2012, prices for bunker fuel used to propel container ships soared to a record above $720 a ton.
“The newly rising energy costs, of which bunker is the largest component, burdened the liner shipping sector also in 2012 again,” Hapag-Lloyd said in the statement. “The marked downturn in the global economy also resulted in unexpectedly low cargo volumes and an absence of the peak season in the second half of the year.”
With bunker prices at an average of $660 a ton last year, Hapag-Lloyd had to spend 9 percent more capital on fuel than in 2011, while its overall transport expenses jumped by more than 900 million euros. The average freight rate advanced 3.2 percent last year to $1,581 per standard container, Hapag-Lloyd said.
Chief Executive Officer Michael Behrendt said the goal for this year is to achieve a “solid improvement in earnings” with the help of rate increases and further cost reductions that will enable the company to resume a dividend payment.
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