Increased container shipping volumes and freight rates in the third quarter have boosted Hapag-Lloyd following a series of poor results since its acquisition of CP Ships in late 2005.
TUI AG, the parent company of Hapag-Lloyd, today reported third quarter earnings before interest, taxes, depreciation and amortization (EBITA) from its shipping division (container shipping and cruise operations) of 103 million euros ($148 million), compared to a EBITA loss of 25 million euros a year before.
Turnover from the shipping division in the quarter rose 6.3 percent to 1.61 billion euros ($2.30 billion), which TUI said was not aided by the persistently weak U.S. dollar.
The German group said that container shipping, the largest part of its shipping unit, experienced sales growth of 5.5 percent in the third quarter. The increase was helped by volume growth of 12.4 percent and average freight rates for the first time this year being above the level seen in the equivalent period last year.
"The greater earnings from our shipping division are partly the result of an increase in efficiency achieved by the takeover of CP Ships," said TUI's Chief Executive Officer Michael Frenzel.
After nine months of 2007, TUI's shipping division posted EBITA of 257 million euros ($368 million), from a loss of 91 million euros after three quarters of 2006. Revenue for the division declined 2.3 percent to 4.64 billion euros ($6.64 billion) against 4.76 billion euros.
Container shipping revenue for the period declined 2.8 percent as average freight rates were still 4.2 percent behind year-on-year. Hapag-Lloyd's box volume growth for the first nine months stood at 9.9 percent.
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