BERLIN: German container shipping firm Hapag-Lloyd reported a 66 percent year-on-year fall in operating profit for 2016, blaming mainly significantly lower freight rates.
Operating profit came to 126 million euros ($133.5 million), while earnings before interest, tax, depreciation and amortisation were down 27 percent at 607 million, it said in a statement.
But it said transport volumes rose by 2.7 percent to 7.6 million twenty-foot equivalent units (TEU) and that lower bunker prices – the cost of ship fuel, which is tied to crude oil – and ongoing synergies from its merger with Chilean peer CSAV, as well as cost savings, increased efficiency.
Global container shipping is suffering its worst downturn due to weaker demand in a faltering global economy and an excess of ships. Freight rates fell 15.4 percent in 2016 to an average $1,036 per TEU, Hapag-Lloyd said.
Tough conditions have led many banks to cut lending to the industry. However, Hapag-Lloyd placed two bonds in recent months, with volumes of 200 million and 250 million euros, partly for the early redemption of existing notes.
Hapag-Lloyd is due to report a 2016 net profit figure and guidance for 2017 when it publishes full annual results on March 24.
