As a result of increased freight rates and higher volumes, Hapag-Lloyd achieved an EBITDA of 335 million euros and an EBIT of 26 million euros for the year ended December 31, 2012, allowing it to exceed industry performance norms. Average freight rates in 2012 witnessed a year-over-year increase of 3.2 per cent to US$1,581 per TEU. Transport volume rose by 1.1 per cent to approximately 5.3 million TEUs. Revenue reached 6.84 billion euros and was 12.1 per cent higher than in the previous year. Net profits for the Group of 128 million euros were reported.

Bunker prices soared to record levels in 2012, with Hapag-Lloyd spending 9 per cent more for bunker fuel last year, after a 34 per cent increase the year before. Overall, transport expenses in 2012 were up more than EUR 900 million over the previous year.

The downturn in the global economy resulted in unexpectedly low cargo volumes and an absence of a peak season in the second half of the year. The rate increases implemented in the first half of the year – amounting to more than 12 per cent between January and July – deteriorated again in the second half of the year as a result of weaker demand.

“Despite a difficult economic environment, we were able to generate a positive operating result, as we did in 2011. Although this meant that we performed well compared to the rest of the industry, earnings fell short of our expectations and are not satisfactory,” said Michael Behrendt, Chief Executive Officer of Hapag-Lloyd. “Our goal for the current financial year is to achieve a solid improvement in earnings with the help of our already announced rate increases and further cost reductions in order to be able to distribute a dividend again.”

Hapag-Lloyd was able to mitigate the impact of difficult market conditions thanks to aggressive yield management, strict cost discipline and maintaining a competitive fleet comprising the latest newbuilds with capacities of 13,200 TEU. The company postponed delivery of the last three already fully-funded newbuilds from the second half of 2013 to March and April of 2014. Hapag-Lloyd is using a mix of owned and chartered tonnage to maintain flexibility in meeting changes in market demand. If required, Hapag-Lloyd can return chartered ships to the owners.

The successful launch of the new G6 Alliance was another milestone in 2012, founded by Hapag-Lloyd together with five Asian partners for the Far East trade. “The G6 Alliance enables us to offer our customers a much better product without additional costs,” said Michael Behrendt. After its successful launch, the G6 Alliance will be extended to the trade between Asia and the North American East Coast, starting in May of 2013. Hapag-Lloyd will be able to offer its customers 40 per cent more port connections and 70 per cent more weekly connections between the two continents without having to provide additional tonnage.

According to industry forecasts from IHS Global Insight, transport volumes in worldwide container shipping are set to increase by 3 per cent in 2013 and by as much as 6 per cent annually in the following years. Global transport volumes are forecast to rise by a total of 27 per cent or 33 million TEUs to a global annual level of 158 million TEUs by 2017. At the same time, very few shipping companies are ordering new ships and an increasing number of vessels are being taken out of service. “Supply and demand levels are starting to converge again. Given that 90 per cent of all goods traded around the world are transported by sea, container shipping continues to be a definite growth industry,” states Michael Behrendt.

Even after 791 million euros of investments in 2012 to acquire new vessels and containers, the company’s balance sheet remained strong with an equity ratio of 45.5 per cent. Furthermore, with liquid reserves of over EUR 630 million, including unused credit lines), the company is well-positioned for 2013.