Hapag posts USD660 million loss

German container line Hapag-Lloyd closed 2014 with a huge net loss of EUR604 million (USD662 million) despite solid cargo volume growth and savings from lower fuel costs.

The result marks a sharp deterioration from 2013 when the line lost EUR97 million. The company blamed the loss on special items related to the takeover of Chilean shipping company CSAV’s container shipping activities totalling around EUR130 million and a EUR127 million asset write-down on a portfolio of vintage container vessels.

Hapag’s CEO Rolf Habben Jansen described 2014 as “an extremely disappointing year” in terms of the carrier’s earnings development, but the group had started to build a better foundation for the future through its merger with CSAV, he said.

Upon integration of the two businesses, Hapag-Lloyd expects to derive synergies totalling more than USD300 million a year.

Earlier this week, the group announced the departure of its chief financial officer Peter Ganz on 1 April, but said his resignation was not due to failings but was mutually agreed some months ago to make way for an executive nominee by CSAV, Nicolas Burr, the Chilean company’s chief financial officer.

After the transfer of its container activities to Hapag and another capital increase, CSAV is now Hapag-Lloyd’s largest shareholder.

Hapag’s revenue rose by 3.7\% to EUR6.8 billion last year due to volume growth of 7.5\%, which more than offset the drop in average freight rates. The collapse in oil and fuel prices last year offered only modest relief on the cost side due to limited exposure to the bunker spot market.

Up to 80\% of Hapag-Lloyd’s bunker requirements are hedged with financial instruments, the carrier said.

source:ihsmaritime360.com