Hapag-Lloyd swung to an operating loss of $986 million in the first nine months of 2009 from a year-earlier profit of $320 million as Germany's biggest ocean container carrier booked double digit declines in cargo volume and freight rates.
The losses continued into the fourth quarter, according to TUI, the German tourism group that owns 43.3 percent of the world's fifth largest carrier.
Revenue slumped by around 29 percent in the nine months ended in September to $4.8 billion from $6.7 billion in the first nine months of 2008.
Cargo volume shrunk 17.4 percent to around 3.7 million 20-foot equivalent units, and the average freight rate was down 22.8 percent at $1,221 per TEU.
The container shipping market is recovering in the 2009/2010 financial year, TUI said. "Overall, however, profit contributions by Hapag-Lloyd are expected to be negative in the current financial year," it said.
TUI said it made a profit of $1.6 billion on the sale of a 56.7 percent stake in Hapag-Lloyd to the Hamburg-based Albert Ballin consortium earlier in the year.
This offset losses at TUI's core tourism unit and boosted net income to $487 million from $49.2 million in the corresponding period in 2008.
TUI provided an additional $1 billion aid to Hapag-Lloyd in October by converting loans already made to the carrier into hybrid capital.
TUI has the right to convert $500 million of the hybrid capital into Hapag-Lloyd shares from 2011 which would increase its shareholding to a maximum of 49.9 percent.
Hapag-Lloyd also has obtained loan guarantees totaling $1.8 billion split between the German government and the city of Hamburg to help it survive the slump in container shipping.
Hapag-Lloyd will continue losing money in 2010 despite cost cuts and improving market conditions, according to Klaus-Michael Kuehne, the second largest Albert Ballin investor.
The losses continued into the fourth quarter, according to TUI, the German tourism group that owns 43.3 percent of the world's fifth largest carrier.
Revenue slumped by around 29 percent in the nine months ended in September to $4.8 billion from $6.7 billion in the first nine months of 2008.
Cargo volume shrunk 17.4 percent to around 3.7 million 20-foot equivalent units, and the average freight rate was down 22.8 percent at $1,221 per TEU.
The container shipping market is recovering in the 2009/2010 financial year, TUI said. "Overall, however, profit contributions by Hapag-Lloyd are expected to be negative in the current financial year," it said.
TUI said it made a profit of $1.6 billion on the sale of a 56.7 percent stake in Hapag-Lloyd to the Hamburg-based Albert Ballin consortium earlier in the year.
This offset losses at TUI's core tourism unit and boosted net income to $487 million from $49.2 million in the corresponding period in 2008.
TUI provided an additional $1 billion aid to Hapag-Lloyd in October by converting loans already made to the carrier into hybrid capital.
TUI has the right to convert $500 million of the hybrid capital into Hapag-Lloyd shares from 2011 which would increase its shareholding to a maximum of 49.9 percent.
Hapag-Lloyd also has obtained loan guarantees totaling $1.8 billion split between the German government and the city of Hamburg to help it survive the slump in container shipping.
Hapag-Lloyd will continue losing money in 2010 despite cost cuts and improving market conditions, according to Klaus-Michael Kuehne, the second largest Albert Ballin investor.