Hapag-Lloyd's Quarterly Profit Up, Sees More Cost Cuts
German container shipping group Hapag-Lloyd reported a rise in third-quarter net profit and said it would press ahead with cut costs and seek economies of scale to cope with the worst downturn the industry has ever seen.
Net profit at the Hamburg-based firm came to 8.2 million euros ($8.83 million) in the three months ending Sept. 30, up from 3.2 million a year earlier, while profit before interest and tax (EBIT) came to 65.6 million euros, down from 80.9 million euros previously.
Container lines, which transport everything from bananas to iPhones, are struggling with the confluence of a glut of ships, a faltering global economy and weaker consumer demand.
"The market has been very difficult so far this year, but in that environment, Hapag-Lloyd has performed relatively well, which underlines our competitiveness," said Chief Executive Rolf Habben Jansen.
"Our main focus for the upcoming quarters will be to further optimise our cost position," he added.
The industry has been in prolonged downturn since 2008 due to excess of ship capacity and slowing trade.
Japan's top three shippers said last month they will integrate their container operations to create the world's sixth-largest fleet and global market leader A.P. Moller-Maersk posted a third-quarter loss.
Hapag-Lloyd said it transported 5.65 million twenty foot equivalent units (TEU) in the first nine months of the year, up 1.3 percent on the year, when the average freight rate fell by 17.7 percent.
Hapag-Lloyd signed a binding agreement with Arab peer UASC in July to form the world's fifth largest shipping company by the end of 2016, which is expected to bring annual net synergies of $400 million, some of which should take effect from next year.
Shareholders approved a capital increase in the summer to fund the deal.
The enlarged company will also be the key player in a new shipping alliance, due to start in April next year.
Hapag-Lloyd shares were up 0.2 percent at 18.2 euros by 1424 GMT, in line with the SDAX index.
(Reporting by Vera Eckert)