Hamburg Sud reports poor liner results

Hamburg Sud reports poor liner results

   Hamburg Sud, the German liner and bulk shipping group, said its results from liner shipping fell below expectations last year, whereas profits from bulk shipping showed “a pleasing development.” The group’s result declined last year overall.

   Hamburg Sud doesn't provide figures on its profit results, but said Brazil, an important country for the group, struggled with stagnation last year. This led to a continuing imbalance between weak containerized cargo volumes to Brazil and stronger exports from that country. Hamburg Sud also cited start-up losses following the acquisition of the Asia/South America liner services of Kien Hung and of the North Europe/Mediterranean liner services of Ellerman.

   But charter rates for Panamax bulk carriers rose from just under $11,000 a day at the start of 2003 to more than $40,000 at the end of the year, boosting the bulk shipping revenue of Hamburg Sud.

   Although Hamburg Sud also increased its container carryings 44 percent last year to 1.1 million TEUs, group revenue in euros climbed only 13 percent to 1.9 billion euros ($2.4 billion). The German group said the dollar was weaker last year, and freight rates were under “strong competitive pressure.”

   The liner trades from Europe and North America to South America remained weak last year, with a southbound ship utilization from Europe of only 40 percent. The northbound trades remained strong, with a high capacity utilization, Hamburg Sud said. However, attempts by competitors to gain market share in the trade from South America to North America made it “difficult to push through rate increases,” the German company said.

   For 2004, Hamburg Sud expects higher cargo growth in the South American trades and high capacity utilization northbound. It said it will step up its efforts to restore northbound rates from South America.

   The group also predicts that it will achieve what it describes as “a decent result” in 2004.

   Hamburg Sud stressed the substantial containership capacity on order worldwide.

   “Certain question marks hang over the assessment of developments beyond 2005 in view of the considerable newbuilding orders for containerships already in the pipeline up to 2007,” the group said. “The yards’ orderbooks indicate a marked increase can be expected — especially in large post-Panamax tonnage above 5,500 TEUs — and this will find its way into the major Far East trades,” it added.