HAPAG-LLOYD REPORTS 117% RISE IN LINER SHIPPING PROFITS

HAPAG-LLOYD REPORTS 117% RISE IN LINER SHIPPING PROFITS

   Hapag-Lloyd, the shipping, chemical logistics and construction modules group, reported a 117-percent increase in the operating profit of its container shipping arm Hapag-Lloyd Container Line for its fiscal year ended Sept. 30, to euro 182 million ($171 million).

   The result compares with an operating profit before interest of euro 84 million in the previous fiscal year.

   Hapag-Lloyd Container Line posted a 29-percent increase in revenues, to euro 2 billion ($1.8 billion), from euro 1.5 billion.

   Including its chemical logistics and construction modules businesses, the Hapag-Lloyd AG group reported an operating profit before interest of euro 283 million ($266 million) for the year ended Sept. 30, compared to a pro forma 1998/1999 operating profit of 142 million. Group net profit rose to euro 181 million ($170 million), from euro 71 million and revenues increased to euro 3.6 billion ($3.4 billion), from euro 3 billion.

   “The main growth factor for revenues and profitability was container shipping,” said Bernd Wrede, chairman of Hapag-Lloyd, commenting on the annual results.

   Hapag-Lloyd Container Line’s revenues benefited from “slightly increasing freight rates” during the fiscal year, a favorable U.S. dollar/euro exchange rate and a 14-percent increase in volume, to 1.6 million TEUs carried.

   Internally, Hapag-Lloyd also attributed the record profits from container shipping to productivity gains.

   Because it is moving the end of its accounting year from September to December, Hapag-Lloyd also announced financial results for a truncated accounting year from Oct. 1 to Dec. 31. The group posted a net profit of euro 78 million ($73 million) for the three-month period, with an operating profit of euro 92 million ($86 million) and group revenues of euro 995 million ($935 million).

   Wrede said that Preussag, the parent company of Hapag-Lloyd, has made no decision on a timetable for a potential initial public offering of its sister company. Last year, Preussag canceled a plan to list about 50 percent of Hapag-Lloyd and list the company on the stock exchange.

   However, Wrede welcomed the prospect of CP Ships and P&O Nedlloyd going public with their own stock market listing as a positive development for the container shipping industry. He repeated his view that there is a need for more “shareholder pressure” on the management of shipping companies.

   Wrede said Hapag-Lloyd is confident it can achieve “another strong performance” this year, but he announced no specific forecast profit figure.

   Hapag-Lloyd Container Line expects world container traffic growth to slow this year, to about 6 percent on the east/west trades. Gunther Casjens, chief executive officer of the shipping line, predicted that his company would increase its volume by more than 10 percent this year, or about twice the average market growth, partly by entering new trade routes. The South American trades to and from North America and Asia are likely additions to the carrier’s route network, he indicated.