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Hapag-Lloyd hit by rate drop

Hapag apprentices 2016HAMBURG: August 10, 2016. Hapag-Lloyd has reported a 19 percent drop in 2016 first half (H1) revenue to €3.78 billion. The company cited a similar percentage fall in freight rates for the decline. As a result, H1 EBITDA fell 60 percent to €196.7 million year-on-year.

Hapag-Lloyd said cost savings of €600 million from lower bunker prices and CSAV integration synergies contributed to a net profit of €142.1 million – 9.0 percent less than the same period in 2015.

Expressing his disappointment with the result, CEO Rolf Habben Jansen said that the cost savings had not been enough to compensate for the drop in freight rates: "Even though freight rates have finally gone back up towards the peak season in various trades, this rebound is coming later than anticipated and more is needed going forward."

Habben Jansen said the company's main focus for the rest of the year would be to cut costs where possible while trying to improve rates. "In this difficult competitive environment, it is very important to complete the transaction with UASC as quickly as possible. The integration will bring us annual net synergies of at least US$400 million, some of which should already take effect next year," he added.

Hapag-Lloyd has invested €178.8 million in newbuilds this year as well as in 64 'newbies' (right) to add to its apprenticeship program – the largest of its type in Germany. The company employs 239 apprentices and students in dual-track study programs. Of these 127 are based on shore and 112 are in the marine division.

"Hapag-Lloyd has been investing in the next generation of maritime staff for many years so that Germany remains one of the leading shipping nations in Europe," explained Habben Jansen. "Many of our managers and captains today are former Hapag-Lloyd apprentices. That's just one of the reasons why we view hiring young apprentices as laying the foundation for the future success of our company."

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