Hapag-Lloyd Delays Recovery Hopes
German container shipping line Hapag-Lloyd reported a higher net profit and operating result in the first quarter of 2018 on Monday, citing better transport volumes, but said earnings improvements would mostly be made in the second half.
"We have had a solid start into the current year, but the market environment is challenging," Chief Executive Rolf Habben Jansen said.
"Freight rates have been under pressure, bunker costs and trucking costs in some important markets were up and we faced a weaker U.S. dollar, whereas higher transport volumes and synergies supported the result," he added.
In an interview, Habben Jansen said freight rates would turn around from the end of the second quarter, encouraging the company to maintain guidance for higher earnings before interest, taxes, depreciation and amortisation (EBITDA) and operating results.
Analysts see an industry rebound from years of crisis, sparked by an over-ordering of vessels, thanks to brisk economic growth and as a supply glut evaporates - trends that Habben Jansen said remained intact.
Hapag-Lloyd will also benefit from its merger with Arab peer UASC last year, with 85 to 90 percent of the $435 million in anticipated annual synergies from the takeover seen in 2018.
The group posted a net loss of 34.3 million euros ($41 million) in the January-March period, compared to a loss of 58.1 million in the year-earlier quarter.
Quarterly EBITDA rose 84.1 percent to 219.4 million euros.
Transport volumes reached 2.86 million twenty foot equivalent units (TEUs), up from 1.93 million a year earlier.
But bunker fuels, a key cost component, were up 18.8 percent at $372 per tonne in the first three months of 2018.
The trend mirrors a surge in global crude oil prices after the United States exited a nuclear deal with Iran and imposed sanctions against the OPEC member.
Shares were down 2.1 percent at 0840 GMT.
($1 = 0.8361 euros) (Reporting by Vera Eckert and Jan Schwartz Editing by Maria Sheahan and Dale Hudson)