DGAP-News: Hapag-Lloyd Holding AG substantially increases rate, revenue and result

DGAP-News: Hapag-Lloyd Holding AG / Key word(s): Interim Report/Half
Year Results
Hapag-Lloyd Holding AG substantially increases rate, revenue and
result

14.08.2012 / 08:09

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Hamburg, 14 August 2012

Hapag-Lloyd substantially increases rate, revenue and result

Successful turnaround in Q2 / Positive operating result of EUR 30.8 million
/ Revenue up 21% on last year / Average freight rate USD 110/TEU higher
than in Q1 / Further increase in bunker prices and energy costs puts a
burden on a sustainable earnings recovery

Following a seasonally weak first quarter, Hapag-Lloyd achieved a
turnaround in the second quarter of 2012, improving its result by more than
EUR 125 million compared to Q1. This was primarily due to the rate
increases successfully implemented by the Company, which started to become
effective in the second quarter. The weighted average freight rate rose by
7.4% in Q2 2012, taking it to USD 1,594/TEU. This was USD 110/TEU higher
than in the first quarter and USD 63/TEU up on Q2 2011. The transport
volume totalled 1.36 million TEU in the three months to June -
approximately 2% higher than in the same period of last year. Hapag-Lloyd
also recorded a sharp increase in revenue, which amounted to around EUR 1.8
billion in the second quarter, a growth of some 21% on Q2 2011.

In the second quarter, Hapag-Lloyd had to cope with a massive rise of EUR
330 million in transport expenses (+26%) as against the same period of last
year. This stemmed particularly from soaring energy prices. At USD
694/tonne, the average bunker consumption price in Q2 was well above the
going rate from a year earlier, which was already high (USD 609/tonne). It
was also substantially up on the previous years' average prices (2011: USD
605/tonne and 2010: USD 453/tonne). As well as affecting bunkers, the
rising energy prices impacted on services provided by terminal operators
and carriers using inland waterways, rail and road networks. Hapag-Lloyd
buys these kinds of services around the world.

Despite the extreme pressure on costs, Hapag-Lloyd generated an operating
profit of EUR 30.8 million (adjusted EBIT) in the second quarter of 2012.
It thereby improved on its second-quarter performance from 2011 by 18%.
After deducting interest and taxes, the Company almost broke even in Q2
2012, posting a Group net result of EUR -7.3 million. EBITDA came in at
approximately EUR 102 million (Q2 2011: EUR 85 million).

'Hapag-Lloyd increased the rate level very successfully in the second
quarter. Following on from Q1 - which is always seasonally weak - this
means that we returned to operating profitability because we have a highly
efficient cost management system and have consistently prioritised price
quality over transport volume. However, the further increase in expenses
for bunker and other energy costs prevented us from posting an even better
result,' said Michael Behrendt, Chief Executive Officer at Hapag-Lloyd.
'High bunker prices in particular cause our expenses to increase
dramatically - they are by far the biggest cost factor for our business.
Further rate increases are crucial to compensate for these elevated
external costs. The cargo on board our vessels has to cover the cost of
transportation. Otherwise, we will be unable to operate our reliable,
global maritime shipping networks sustainably - something which the
globalised economy relies on.'

In the first six months of 2012, revenue increased by more than 14%
compared to the first half of 2011, coming in at EUR 3.4 billion.
Hapag-Lloyd transported more than 2.68 million TEU - an increase of 5.8%.
Transport expenses for the first half were up by a total of EUR 561 million
on last year, largely due to higher energy costs. This is equivalent to a
22% rise. EBITDA totalled EUR 80.9 million in the six
months to June, while the adjusted EBIT stood at EUR -68.7 million due to
the seasonally weak first quarter.

Investments of EUR 494.6 million were made in the first half, with most of
the funds going towards ships and containers. Long-term financing has been
secured successfully for the vessels on order and all the investments in
containers which have been made and are planned. Equity of EUR 3.26 billion
and an equity ratio exceeding 47% (as at 30 June) clearly illustrate that
Hapag-Lloyd's financial structure remains sound.

Following a slight easing in bunker prices at the end of the second
quarter, the current trend is pointing upwards again. For this reason, rate
increases were recently announced for a number of trades, and further price
hikes will be unavoidable. Hapag-Lloyd is striving to post positive
operating earnings again for the current financial year, provided that
there is no fundamental escalation of the risks and assuming it proves
possible to implement further rate increases in the course of 2012.

At present, Hapag-Lloyd has around 6,970 employees at 300 sites in 114
countries. The fleet consisted of 147 vessels with a total capacity of
667,000 TEU on 30 June. On 5 July, Hapag-Lloyd also took delivery of the
first of ten 13,200 TEU newbuilds. The vessel will be named 'Hamburg
Express' at a ceremony in Hamburg on 17 August.


End of Corporate News

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181538 14.08.2012