FRANKFURT, Feb 28 (Reuters) – German container shipping firm Hapag-Lloyd on Wednesday reported its 2017 operating profit more than tripled, citing higher transport volumes and a slight recovery in freight rates.
It also said that besides a positive development of worldwide container transport demand and rising revenue from freights, last year’s merger with Gulf peer UASC provided more efficiencies.
The move made Hamburg-based Hapag-Lloyd the number five container shipper worldwide, amid ongoing consolidation.
Operating profit before interest and tax (EBIT) rose to 411 million euros ($502 million) from 126 million the year earlier, the company said in a statement detailing preliminary results.
Shipping has struggled with overcapacity, price wars and freight rates far below break-even levels, but industry analysts say the worst may be over.
Hapag-Lloyd said in January that transport demand would rise this year but that the cost of bunker – shipping fuel whose price is tied to crude oil – was a worry.
Its net debt stood at 5.7 billion euros at the end of December.
Sector peer A.P. Moller-Maersk earlier this month missed profit forecasts and gave what analysts saw as a conservative outlook, despite expressly voicing optimism about the industry’s fundamentals.
Hapag Lloyd’s 2017 earnings before interest, tax, depreciation and amortisation (EBITDA) stood at 1.06 billion euros, compared with 607 million a year earlier.
It transported 29 percent more volume, 9.8 million tonne twenty foot equivalent units (TEU), but bunker prices rose to $318 a tonne from $226 previously, driving up expenses. Average freight rates were $1,051/TEU, up from $1,036 in 2016, it said.
Hapag-Lloyd is due to provide 2018 guidance when it publishes full annual results on March 28.
Its shares were 3.5 percent higher at 34.28 euros by 1156 GMT, having earlier jumped to a four-week high of 34.60 euros.
($1 = 0.8186 euros) (Reporting by Vera Eckert Editing by Arno Schuetze and Maria Sheahan)
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