Hamburg Süd’s revenues surge 16.8% in 2015

The ocean carrier posted revenues of $6.1 billion for 2015, a 16.8 percent increase compared to 2014.

   Germany’s Hamburg Süd Group had revenues of $6.1 billion in 2015, a 16.8 percent increase over 2014, the company said. However, due to the changing currency rates (a euro was worth on average only $1.11 in 2015 compared with $1.33 in 2014), revenues as measured in dollars declined from $6.9 billion in 2014 to $6.7 billion in 2015.
   “The main drivers were the successful takeover and integration of the container operations of the Chilean shipping company Compañía Chilena de Navegación Interoceánica S.A. (CCNI) in late March 2015 as well as the entry into the East–West trade lanes,” Hamburg Süd said.
   “Despite the weakness of the South American economies (especially Brazil, Argentina, and Venezuela), this made it possible to meet the volume growth planned for the reporting year,” the company added.
   Liner volumes in 2015 totaled 1 million TEUs, a 21.5 percent increase over 2014.
   In addition, Hamburg Süd said its fleet capacity grew 16 percent year-over-year in 2015 to 625,000 TEUs. At the end of the year, the carrier said it had 189 vessels compared with 168 vessels a year prior and that 48 of the vessels were owned.
    A total of 130 of those ships were deployed on liner services, while 59 ships were bulk carriers and product tankers in the tramp sector. Ships added in 2015 included three “Cap San” class ships with capacity for 10,600 TEUs each. Four vessels, each with a capacity of 3,800 TEUs, were ordered for delivery in 2017. The company increased its container pool by 22 percent to 562,000 units on an annual average.
   Today, Alphaliner ranks Hamburg Süd as the seventh largest container carrier, with a capacity of 650,525 TEUs on 130 ships, in which 44 are owned and 86 are chartered. In addition, the company has nine ships on order with 39,430 TEUs of combined capacity.
   Last year, 5.64 billion euros of Hamburg Süd’s revenues came from its liner operations, 279 million euros from tramp shipping and 139 billion euros from other activities.
   “Due to global overcapacity, freight rates declined by roughly 16 percent. The resulting loss of revenue could only partially be offset in the liner division by falling fuel prices, and restrictive capacity and cost management. The result in this sector failed to meet expectations and must be described as less than satisfactory,” Hamburg Süd said.
   It added bulk shipping “was also characterized by very difficult market conditions. Due chiefly to China’s lower raw material imports, demand for shipping space remained static while global fleet growth rose once again on the previous year. As a result, the revenue generated fell sharply. Bulk shipping fell well short of the result planned for the reporting period. Only the product tanker segment achieved a satisfactory result.”
   Hamburg Süd has 5,900 employees and is part of Germany’s privately-owned Oetker conglomerate, whose activities include food, beverages, banking, hotels and logistics.
   In the coming year, Hamburg Süd said it “anticipates a further significant, albeit more moderate increase in carryings of some 8 percent for 2016 compared to the previous year. The once again above-average increase in excess of market growth is based primarily on the capacities and market shares built up in the past fiscal year, which are to be maintained throughout 2016 and selectively further expanded. Because freight rates are expected to remain under pressure due to continuing overcapacities and weak economic development, it is anticipated that the shipping group’s turnover will stay roughly the same.”
   “In the current market environment, Hamburg Süd, like most of its competitors, is also exposed to strong downward pressure on earnings,” the company said. “The projects successfully launched last year to achieve sustainable cost reductions will, therefore, also be further stepped up in 2016 by, among other things, measures to cut fuel consumption, the implementation of further synergies and economies of scale as well as progressive efficiency increases in processes. Where required, capacity reductions will be undertaken in individual trades.”
   In addition, Hamburg Süd anticipates further consolidation of  liner shipping.
   “The lines will only be able to regain reasonable levels of returns if capacities and cargo volumes will be in balance on a global scale,” the company said. “The result of Hamburg Süd liner shipping in 2016 is significantly dependent on the development of the global economy and global trade as well as of the industry’s ability to adapt to changed underlying conditions. No fundamental improvement of the 2016 market environment is expected in dry bulk shipping. For product tanker markets, the outlook for 2016 remains cautiously positive.”