GERMAN shipping giant Hapag-Lloyd has posted a first half net loss of EUR142.1 million (US$158.3 million) based on revenues of EUR3.7 billion, which fell 18.9 per cent year on year. This contrasts with last year's net profit of EUR157.2 million.

"The first-half result is disappointing," said Hapag-Lloyd CEO Rolf Habben Jansen. "Our cost saving measures and efficiency programmes are on track and the synergies from the merger with CSAV are being realised on schedule.

"But this isn't enough to compensate for the drop in freight rates. Even though freight rates have finally gone back up towards the peak season in various trades this rebound is coming later than anticipated and more is needed going forward," Mr Habben Jansen said.

"In the second half of the year, our main focus will be to further improve our cost base and to do whatever we can to get freight rates back to a more sustainable level," he said.

"In this difficult competitive environment, it is very important to complete the transaction with UASC as quickly as possible and to start the integration of UASC immediately after the completion of all pre-closing conditions. The integration will bring us annual net synergies of at least $400 million, some of which should already take effect next year."

During the period under review, Hapag-Lloyd invested EUR178.8 million in vessels. With an equity ratio of 44.4 per cent and liquidity reserves of EUR774.9 million (both as of 30.6.2016), the company is well positioned compared to its international competitors.

(Source:shippingazette)